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Business News/ Politics / Policy/  Income tax department looks to go paperless
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Income tax department looks to go paperless

Income tax department will use email for sending questionnaires and notices, to initiate paperless assessment in five cities

Photo: MintPremium
Photo: Mint

New Delhi: In a taxpayer-friendly move, the income tax (I-T) department is exploring a gradual move towards a paperless assessment system wherein correspondence with taxpayers will be over email, eliminating the need for a visit to the I-T offices that can be both time-consuming and an arduous task.

The I-T department will use email for sending questionnaires and notices at the time of scrutiny proceedings and getting responses from taxpayers.

To begin with, it is planning to initiate this paperless assessment in five cities for smaller “non-corporate charges". Delhi, Mumbai, Bengaluru, Ahmedabad and Chennai are the five cities that have been chosen for this pilot.

A non-corporate charge involves assessments of individuals, partnerships and sole proprietorships other than companies registered under the Companies Act.

“This will eliminate the necessity of visiting income tax offices by taxpayers, particularly in smaller cases, involving limited issues and where the taxpayer is able to provide details required by the AO (assessing officer) without necessitating his physical presence," the Central Board of Direct Taxes (CBDT) said in instructions to principal chief commissioners of income tax dated 19 October.

Initially, 1,000 cases in each of these five centres will be identified and a major part of the assessment proceedings will be done online. Those cases which have been selected for scrutiny based on annual information reports or on account of non-matching of 26AS data will be covered in this pilot. Form 26AS is a tax credit statement which shows the quantum of income tax that has been paid by the taxpayer.

Of the total 40 million tax returns filed by taxpayers every year, the I-T department selects around 3-4 million cases for scrutiny.

To be sure, the cases will be selected for e-assessments only after the taxpayers’ nod. “Steps are being taken by CBDT to devise a suitable mechanism for setting up a standardized platform for making such email-based communication between the taxpayer and the income tax department seamless and user friendly," the instructions said.

The I-T department’s initiative follows the success of its e-filing initiative. It received a record 20.6 million tax returns through its e-filing portal for tax returns for the period 2014-15, an increase of more than 26% from the year-ago period. It also offered the facility of electronic verification of returns for the first time, which did away with the need for taxpayers to email a signed copy of the I-T return acknowledgement form to the central processing office in Bengaluru. Almost 3.3 million returns were verified through this facility. All of these steps facilitated faster refund processing by the I-T department.

Rakesh Nangia, managing partner, Nangia and Co., a chartered accountancy firm, said the I-T department’s move will help ease the assessment process and change the way litigation is carried out in the country.

“As of now, all assessments go through a long process of hearings and submissions, which is painstaking and takes a toll on assessees and consultants. The government’s move of facilitating e-assessments will result in a hassle-free and seamless assessment," he said.

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Published: 20 Oct 2015, 07:56 PM IST
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