FM flags off project for income refunds
The project would cover Delhi and Patna areas where income refunds would be made through the SBI, reports Deepak Joshi.india Updated: Jan 24, 2007 18:42 IST
Finance Minister P Chidambaram on Wednesday flagged off a pilot project covering Delhi and Patna areas where income refunds would be made through the State Bank of India.
SBI has been appointed as banker to credit the amount to the taxpayers' accounts and is expected to do so within three days of an assessment order being forwarded to it. Plans are afoot to extend the pilot scheme to 60 cities as they constitute 80 per cent of tax assessees.
SBI will segregate payments data for electronic clearing system or banker's cheque. Refunds will be made under registered post with acknowledgment due. Details of undelivered cheques are to be returned for fresh issue. The pilot project will make assessees get refunds quickly and the scope for corruption and fraud would be drastically reduced, officials said.
Speaking on the occasion, Chidambaram underlined the need for a speedy refund of income tax claims. "The system of refunds has been affected by bogus cheques. There are instances where second cheques have been issued. Tax challans have been forged," he stated.
He said refund as a proportion of tax collection has been declining. Refunds were down to 18.18 per cent of income tax collections in 2004-05 from 26.52 per cent in 2002-03.
To prevent frauds that have often plagued the system, a host of security measures are being undertaken. Data transmission will be done under 'digital signatures'. Drafts above Rs 2 lakh will be with facsimile signatures of two persons and a transparent sticker would be pasted.
The refund amount is reimbursable to SBI as per the current procedure for government accounts. There will be an indemnity to the income tax department for losses arising from negligence.
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