Claiming tax refunds will no longer be a tedious process for individuals and corporates. The finance ministry (FinMin) will soon launch an electronic refund scheme through the electronic credit system of RBI. This will require changes in treasury rules and audit rules of the government.A senior FinMin official said, “we will be able to launch electronic refund scheme after two months.” The official said that meetings have been held with the Comptroller and Auditor General (CAG) for changing audit rules and treasury rules. This will complete the chain of tax-payer service from PAN allotment to electronic filing of returns and now the upcoming service of electronic refund.According to the official, electronic refund was also recommended by the Kelkar report on direct taxes. The Kelkar report had recommended replacing the existing cumbersome and manually operated procedures for issue of refunds with an efficient IT-based system.Under this system, the revenue department would have to prepare a separate file of all refunds daily which will be downloaded by a payment intermediary. This intermediary will be a designated bank and will be authorised to issue computerised refunds as is the practice for issuing dividend and interest warrants by companies. The designated bank will be required to transmit information regarding issue of refunds to the tax information network which will enable a taxpayer to verify the status of refund claim.The Kelkar report had also recommended that the revenue department should design special programmes for retired people, low income tax-payers and groups with special needs who cannot afford expensive services of tax consultants. Expenditure on taxpayer service is at present 1 per cent of the total expenditure on tax administration. The Kelkar report had recommended increasing it to five per cent. Also, setting up tax-payer clinics where tax payers could walk up for assistance would be ideal, the report added.
