The two ITs — income tax, and information technology — are set to come together in an even greater partnership, going by the finance minister’s budget announcements.
The finance minister has proposed to introduce a new simplified I-T return form ‘Sugam’ to reduce the compliance burden of small taxpayers who fall within the scope of presumptive taxation.
The present budget has added more muscle to the income tax (I-T) department’s continued attempt to computerize tax administration. While, the processing capacity of the only centralised processing centre (CPC) at Bangalore has been increased from 20,000 to 1.5 lakh returns in 2010-11, two more CPCs will become operational in Manesar and Pune by May this year.
A fourth centre will come up in Kolkata in 2011-12, thereby increasing the processing capacity of the I-T department by three-fold.
The Central Board of Direct Taxes (CBDT) has already facilitated the online preparation and e-filing of income tax returns, e-payment of taxes through 32 agency banks, electronic clearing of refunds directly into taxpayers’ bank accounts, and electronic filing of TDS returns across the country.
The computerisation of I-T department has made both filing of tax returns and tax refunds much faster than it used to be five years ago.
The I-T department is also set to launch 58 more Aaykar Seva Kendras (ASK) to serve tax payers more efficiently. ASK is a pilot project initiated by the department to set up a one-stop service centre for enquiries, and information technology plays a vital role in it.
In a big relief for the salaried class, the finance minister has proposed to exempt them from filing tax returns unless they have other sources of income.
The government will be issuing a notification exempting ‘classes of persons’ from the requirement of furnishing income tax returns, the Memorandum to the Finance Bill 2011 said.
“In cases where there is no other source of income, filing of a return is duplication of existing information," the Memorandum said.