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Monday 27 July 2015

E-filing I-T return: A revolutionary step for taxpayers



Benefits of e-filing

  • All individuals earning over Rs 5 lakh per annum are liable to e-file their tax returns
  • Opting for e-filing speeds up the process, which eventually saves them a lot of time and frustration
  • The tax refund gets deposited in a taxpayer's bank account so that they can utilise that money immediately
  • E-filing carries the advantage of being environment-friendly because there exists negligible paper wastage
  • The taxpayers having Aadhaar card aren't required to send the ITR-V acknowledgement to the CPC in Bengaluru anymore
  • Filing an e-return also benefits the taxpayer with value-added services like viewing Form 26AS (tax credit statement), tracking of refunds, email/SMS alerts regarding status of processing and refunds

·         Vikram Ramchand
·         It's that time of the year when scores of people brave endless meandering queues to file their income tax returns as it is the most important course of action for a taxpayer in India. E-filing of tax returns has gradually been made mandatory by the Central Board of Direct Taxes. As of today, all individuals earning over Rs 5 lakh per annum are liable to e-file their tax returns.
·         E-filing of tax returns has a lot of benefits for the common man and the one that is everyone’s favourite is speedier refunds. The IT Department, has, over the years, effectively reduced its processing time per case, especially when it comes to salaried employees. This has played an instrumental role in speedier dispatch of refunds.
·         Opting for e-filing of returns speeds up the process, which eventually saves them a lot of time and frustration. The tax refund gets deposited in a taxpayer's bank account so that they can utilise that money immediately.
·         Filing e-returns can be done conveniently from within the comfort zone of a taxpayer's home/office without taking the pains of standing in long queues. Additionally, e-filing carries the advantage of being environment-friendly because there exists negligible paper wastage.
·         At present, the I-T Department has introduced an additional advantage for the taxpayers holding an Aadhaar card. These taxpayers aren't required to send the ITR-V acknowledgement to the CPC in Bengaluru anymore.
·         When you are filing your taxes online, you are creating a permanent electronic record for use in the future, which is also more secure than paper-based returns. If a question comes up regarding the tax returns, a taxpayer will not have to dig through filing cabinets or heavy piles of paper. E-filing software usually encrypts and stores a taxpayer's personal and financial details in a database which are further electronically transmitted via a secure connection to the Income Tax Department. He/she can find the information on the computer and get to work right away. This eliminates the chances of a taxpayer's confidential information being misused by any unintended person.
·         This should go without saying, but a taxpayer needs to make sure that his/her tax return is 100% accurate. E-filing takes much of the guesswork out of the procedure of tax returns. There is no need to worry about which tax form is required or what step to take next, specially with private e-filing firms because the e-filing software with built-in validations and electronic connectivity to ITD are seamless and help minimise errors. Manual filing with self calculations can be prone to error. Also, when any paper-based form is transferred to the electronic system, there is always a possibility of human error in data entry.
·         If the tax return is e-filed, then all the correspondence with the Income Tax department, post the filing of the tax return can be done electronically. For example, if the taxpayer e-files his return, and for some reason receives a demand notice from the department, then he can respond to the same electronically by filing a rectification u/s 154 online. However, had he filed his return manually and the same sequence of events had occurred, he would have had to personally take the burden of contacting his jurisdictional assessing officer to challenge the demand.
·         Filing an e-return also benefits the taxpayer with value-added services like viewing Form 26AS (tax credit statement), tracking of refunds, email/SMS alerts regarding status of processing and refunds. Nowadays, even banks insist on the ITR-V acknowledgement generated after e-filing of income tax returns while collecting documents to understand the applicability of the taxpayer to take a loan.
·         The author is co-founder & CIO, Makemyreturns.com. The views expressed in this article are his own