E- Filing returns

“This is a move towards using technology so that the interface between assessing officer and assessee is minimised,” revenue secretary Sumit Bose said at a post-Budget Ficci event.

Analysts say one can get the refund within three to four months after filing the returns online as the government has launched a web-based status tracking facility for refunds and the grievances redressal mechanism has been strengthened for ensuring prompt disposal of all complaints.

The Central Board of Direct Taxes has set up Aaykar Seva Kendras for efficient tax administration and the web-based facility can be used by the taxpayer to track the resolution of refunds and credit for pre-paid taxes and augmentation of processing capacity. Refunds are directly deposited through electronic clearing system in taxpayers’ bank accounts. Electronic filing of TDS returns are now available throughout the country. To ramp up the processing of refunds,the Centralized Processing Centre (CPC) at Bangalore has also increased its daily processing capacity of returns filed. Analysts note that the process of streamlining the tax refunds has helped taxpayers as they do not have to wait endlessly for getting their refunds.

The biggest disadvantage if one does not file the returns before the due date will be a delay in processing of refund. Analysts say the returns which are filed before the due date are processed first. After this,belated filings are taken up and there is a delay in getting the refund. Moreover,for delayed tax returns,one has to pay interest of 1% per month on the amount of taxes. Also,revision of returns is not allowed if filed beyond the due date.

For e-filing,one needs to register at the income tax website and use digital signature. After e-filing,Form ITR-V is generated online,which should be printed,signed and posted to the CPC,Bangalore,within 120 days of e-filing. To ensure speedy refund,the taxpayer has to ensure that once the ITR-V is generated,the form should be downloaded. One must then print the form in blue ink and send the signed form by ordinary/speed post to the CPC. After receiving the signed ITR-V form,the CPC will then send an e-mail acknowledging the receipt of ITR-V to the e-mail ID stated in the return form. Also,the tax payer will get an SMS on his mobile number. In case the tax payer does not get any response from the department regarding receipt of ITR-V,then the taxpayer will have to send a fresh ITR-V to the CPC and get their receipt and this will be the confirmation.

During e-filing,one must be cautious while entering data and should verify all details entered before submitting/confirming the return. Incorrect details may lead to a notice from the IT department. The tax payer should verify that the Permanent Account Number (PAN),the amount of Tax Deducted at Source (TDS) and details of employer are correctly entered in the returns form. Also,details about interest earned from fixed deposit and other income must be mentioned. The tax department usually check these details in an automated process and compare the details with what is available in their database.

Wealth Tax

Even wealth tax will have to be filed in the electronic form and the new norm will be applicable from June 1,2013. In fact,Section 14 of the Wealth-Tax Act provides for furnishing of return of net wealth as on the valuation date in the prescribed form for the net wealth. Currently,certain documents and reports are required to be furnished along with the return of net wealth under the provisions of Wealth-tax Act read with the provisions of Wealth-tax Rules.

Sections 139C and 139D of the Income-tax Act contain provisions for facilitating filing of annexure-less return of income in electronic form by certain class of income-tax assessees. In order to facilitate electronic filing of annexure-less return of net wealth,the finance minister has proposed to insert new sections – 14A and 14B in the Wealth-tax Act on similar lines.

If an individual’s net wealth exceeds R30 lakh,then wealth tax at 1% of the amount by which the net wealth exceeds R30 lakh is to be paid. The net wealth is arrived at by reducing from the gross wealth the debts incurred in relation to acquiring the wealth.

Wealth-tax return is filed in Form BA and if the Wealth-tax returns is furnished after the due date,or is not furnished,the individual will be liable to pay simple interest at the rate of 1% for every month.

Individuals owning one house is exempt from wealth tax. However,additional property not let out for 300 days or more is subject to wealth tax. Jewellery,motor cars,urban land,yachts,boats and planes (non-commercial),and cash in hand above R50,000 are also subject to wealth tax.

Steps to follow

* One can get the refund within 3-4 months as the government has launched web-based status tracking facility for refunds and has strengthened grievances redressal mechanism for ensuring prompt disposal of complaints

* For e-filing,one needs to register at the income tax website and use digital signature. After e-filing,Form ITR-V is generated online,which should be printed,signed and posted to the Centralized Processing Centre (CPC),Bangalore

* The CPC will send an e-mail and SMS acknowledging the receipt of ITR-V. In case the taxpayer does not get any response regarding receipt of ITR-V,then the taxpayer will have to send a fresh ITR-V to the CPC

* While entering data one should verify that the Permanent Account Number (PAN),the amount of Tax Deducted at Source (TDS) and employer details are correctly entered . Incorrect details may lead to a notice from the IT department

* Details about interest earned from FDs and other income must also be mentioned. The tax department check the details in an automated process and compare them with what is available in their database

* Even wealth tax will have to be filed in the electronic form (applicable from June 1,2013). If an individual’s net wealth exceeds R30 lakh,then wealth tax at 1% of the amount by which the net wealth exceeds R30 lakh is to be paid