Filing income tax returns has always been confusing for most first timers. Even those who have filed IT returns before face many issues filing the return on time. Here are 14 helpful initiatives taken by the Income Tax department to simplify the life of tax payers.
Income Tax department of India recently launched some useful initiatives that are tax-payer friendly. These not only help the tax-payer to communicate with the department in a simpler way but also help the department in keeping track of financial transactions by tax payers.
Here are 14 initiatives recently launched by the income tax department that will definitely make the work easy for both the parties –
1. E Sahyog
The recently launched eSahyog initiative enables small taxpayers to interact with the department over email. The paperless initiative will enable IT department to send notices to assessees via email. The step will save them from physically appearing before the tax authorities. It is an online tool to resolve any mismatches in IT returns of taxpayers whose returns have not been selected for scrutiny, without visiting the IT Office.
2. Pan Camps
The government had announced in the last Budget that quoting of PAN (Permanent Account Number) will be mandatory for any purchase or sale exceeding Rs. 1 lakh. The expansion of the number of PAN card holders would help the government implement this budget proposal. Currently there are 23 crore people with PAN card in India.
To facilitate people to get PAN cards, the government plans to launch camps across the country. Since not everyone, especially in the rural areas, possesses a PAN card, such camps might enable people to get access to it easily.
3. Tax return preparer scheme
Would you believe it if we told you that the ITD offers you a tax filing service at your door steps, which consists of trained and certified professionals who can help you file your tax return free of cost or at a minimal fee? Introducing TRPS. Launched in 2006 by the Income Tax Department, TRPS scheme assists small and marginal taxpayers in preparing and filing their tax returns by creating a company of ‘Tax Return Preparers’ (TRPs). They can charge a maximum fee of Rs. 250, or sometimes nothing. Here is how you can find a TRP.
4. Tax refund in 7-10 days
In September 2015, Income Tax Department announced that it will now process and send tax refunds in a short time of 7-10 days. Earlier, taxpayers had to wait for months, or in some cases, even years to get the refund. The step was initiated after the department’s latest technology upgrade of electronic and Aadhaar-based Income Tax Return (ITR) verification. With the introduction of new technology, the department wants to eliminate human interference in taxpayers services to enable faster and hassle-free processing of ITRs and refunds.
5. Simplified IT forms
In May, 2015, The Finance Ministry gave a big relief to the tax payers by introducing a new, simplified three-page income tax return (ITR) forms. They also dropped the controversial provision for mandatory disclosure of foreign trips and dormant bank accounts which are not operational during the last three years. The new forms — ITR 2 and ITR 2A — had only three pages which brought paperwork down to a great extent for the tax payers. The new ITRs replaced the 14-page form that were notified earlier this year.
6. Relief for Travellers
With regard to foreign travel details, it is now proposed that only the passport number, if available, will be required to be furnished in ITR-2 and ITR-2A. There would be no requirement to provide details of foreign trips/expenditure. This would bring relief to all individuals who travel extensively.
7. Clarification on the applicability of MAT
The Government of India accepted the recommendation of the A.P. Shah committee to clarify the total inapplicability of MAT to FII/FPIs not having a place of business/ permanent establishment in India. The confusion over MAT erupted after the tax department sent notices to 68 FIIs demanding Rs. 602.83 crores as MAT dues. The committee was quick to recommend the inapplicability of MAT, which was further affirmed by a circular from CBDT.
8. Electronic Verification of Income Tax Returns
Taxpayers have also appreciated the new initiative of Electronic Verification of the Income Tax Return through Aadhaar card linkage and Net-banking. The testimonials affirm user-friendliness and removal of the hassle of sending the hard copy of the ITR-V form to Bengaluru. Taxpayers have also reported that the process of e-verification shortens the time taken for processing of the return and issue of refund. Salaried employees claimed that they were able to file their tax returns in under ten minutes.
9. Tax Relief to shopkeepers for using Digital Payment System
A unique tax reform that the Finance Ministry is working on actively now is the proposal of offering tax relief to shopkeepers as well as consumers for using the digital payment system. Shopkeepers will be incentivized if their sales exceed a minimum threshold limit for card transactions. As of now many business establishments, including shopkeepers, prefer cash transactions over card or any other electronic form of payment. The excessive use of cash is seen as one of the reasons for a bustling illegitimate parallel economy. This new proposal will not only establish digital transactions, it would also help in clamping down on black money and fake transactions. The offer of tax incentives to both users and shopkeepers makes it a win-win situation.
10. Pre-filled Tax Return Forms
As part of efforts to popularize the electronic mode of filing Income Tax Returns (ITRs), the CBDT is planning to provide “pre-filled” return forms to filers which will have an automatic upload of data on income and other vitals of a taxpayer.
11. Improvement in Taxpayer services
Taxpayer services will be improved to a great extent with CBDT announcing that recommendations of a government-appointed panel on reforms in tax administration will be implemented soon. The TARC (Tax Administration Reform Commission) had also recommended industry-based jurisdiction instead of the current system of territorial revenue collection for direct taxes in the country for which the Board has constituted a committee recently
12. Faster resolution of grievances
The disposal rate of grievances received this fiscal till 22 July through the centralized public grievance redress and monitoring system has increased to 85%, the tax department said. The department will also set up an additional 58 aayakar seva kendras to provide services to tax payers. At present, there are 250 such centers.
13. Establishment of online platform Sevottam
The Income Tax Department has set up its internal online platform known as Sevottam, connecting all Income Tax offices in the country. The details of each consumer grievance will be updated in the platform every day. There will be day to day monitoring by the department on this, to ensure that grievance resolutions are fast and time bound.
14. Taxpayer-friendly steps taken when needed
The CBDT had extended the last date for filing tax returns for the residents of Gujarat due to the disturbances caused in the state over reservations. Consequently, it also issued an order extending the due date for the residents of all the states of India when High Courts of different states ruled varied judgments on the same, so as to avoid discrimination amongst the tax payers.
Special thanks to Raghavendra Prabhu, Raghav Subramani and Vidit Chaudhary from KPMG for their important inputs.