E-filing of returns picking up momentum
The landscape of Income Tax returns filing has been witnessing a slow and steady change with e-filing of returns picking up momentum, especially among the youth, owing to factors like familiarty, ease-of-use, security and speed.india Updated: Aug 01, 2009 10:56 IST
The landscape of Income Tax returns filing has been witnessing a slow and steady change with e-filing of returns picking up momentum, especially among the youth, owing to factors like familiarty, ease-of-use, security and speed. The number of those opting for e-filing has grown from 2.5 million some years ago to 4.5 million in 2008-09 and it is expected to touch the 10 million mark in three years. The growth has been propelled by young individuals tax payers, many of them first-timers who are not familiar with the tax process, according to Ravi Jagannathan, MD and CEO of 3i Infotech Consumer Service which runs Taxsmile.com, an online tax management portal that helps in planning and filing of returns by providing easy-to-use step-by step method. "This segment is tech-savvy and uses the internet for everything right from booking to shopping to banking and find e-filing an easier option", he said.
E-filing has been popular in cities like Delhi, Mumbai, Kolkatta, Bangalore, Hyderabad, Chennai, Pune and Ahmedabad.
"Now we are also seeing growth in cities like Kochi, Mysore, Coimbatore, Bhopal and Nagpur", Ravi said. There has been growth in tier two and three cities too.
Though a chunk of the older segment (35-45 age group) is yet to embrace the e-filing option, thanks to the "I-have-always been-filing my tax-this way" syndrome, and opts for the physical submission option, there are several others who have upgraded to e-filing option.
The demographics of online tax payers was on the increase owing to government-run mass awareness campaigns, spotlight on the process by the media and corporates encouraging employees to opt for it. The no-time-wasting factor has also provided an impetus, Ravi said.
The acceptance of digital signatures has eliminated the need for tax-payers to physically verify their signatures while submitting their returns, doing away with the last mile of filing. Digital signature, a secure option, has helped in increasing the confidence factor, thereby driving volumes.
Digital signatures had also helped address the security concerns of tax-payers who were plauged by fears of identity theft, he said.
Offline filing involved data processing, validation and asssesment which took up time as opposed to e-filing of returns which assures instant processing. The comfort and ease-to-use factor demonstrated by e-filing of returns has also boosted the growth of this option, Ravi said.
Describing the e-filing industry as a nascent one in India, he said though the number of players was growing, companies would have to come up with sustainable models.
"Companies would have to demonstrate the highest possible credentials as it is a technology platform that involves security of data", he said.
Taxsmile had its own income tax preparation and filing website and is also an e-return intermediary duly authorised by the IT department, he said.