E-filing must for people with annual income above Rs 5 lakh

The government had last year introduced the system of e-filing of returns for assessees with annual income of Rs 10 lakh and above. photo: thinkstock

The government is planning to make electronic filing of returns mandatory for taxpayers with a taxable income above Rs 5 lakh.

“Income tax returns for the group above Rs 5 lakh will be e-filed. This is a move towards using technology so that the interface between the assessing officer and assessee is minimised,” Revenue Secretary Sumit Bose said today at a post-Budget interaction with Ficci members.

The reason behind the move, said officials, was the fact that about 80 per cent of taxpayers who are not mandated to file e-returns are already doing so.

Sections 139C and 139D of the I-T Act contain provisions for facilitating filing of return of income in an electronic form by certain classes of income-tax assessees.

Last year, the government had introduced the system of e-filing of income tax returns for assessees with an annual income of Rs 10 lakh and above.

Of 35 million taxpayers, there are about 1.8 million in the income tax slab of Rs 5-10 lakh. A similar number are in the above Rs 10 lakh category.

Of about 16 million people who electronically filed their returns last year, many had a taxable income of less than Rs 10 lakh.

Hence, the finance ministry thought of making e-filing compulsory to include others in the category.

The tax department was earlier expecting electronic returns to go up to 20 million this year. With this new provision, the number could go up further. E-filing will also enable faster processing of refunds.

Bose also said the Income Tax Department was in the process of identifying PAN holders who had not filed returns. He said the tax department would send out a second set of letters to 35,000 assessees, posing queries on whether they had filed income tax returns, as well as the details of the filing.

“We have a whole lot of information with us. There is also information on the cash transaction. Either you pay taxes or these letters would turn into notices,” he said.