Employees of tax-compliant companies will have their income-tax (I-T) returns processed faster and may even get refunds credited to their accounts on the same day, according to a plan that the government is working on.
The I-T department is working on a system of accreditation for companies with high tax compliance, under which tax returns of their employees will be processed and returns issued on the same day, said a government official who asked not to be named.
The tax return processing time is being reduced by integrating the software used in accepting returns and the one used in its processing, said the official.
The idea is to repose greater faith on the returns filed by employees of companies that act as efficient gatekeepers of the tax department by carefully assessing their employees’ tax liability, deducting applicable taxes and remitting it to the exchequer on time. This will also save the department’s time and resources.
“Risk parameters will be defined for identifying companies whose employees will benefit from the same-day return processing facility. Employees of companies that are under suspicion of tax evasion will not benefit from this," the official mentioned above said.
Getting accredited by the tax department as a highly tax- compliant business will also do the company good as it will endorse the governance practices followed by it, something that investors and markets take seriously.
“This move will encourage more people to come voluntarily into the pool of taxpayers and make the existing ones feel good. Accrediting businesses with the tag of high tax compliance will help investors identify well-governed companies too," said Pavan Kumar Vijay, founder of advisory firm Corporate Professionals.