A substantial jump in the number of returns filed electronically in the current financial year is likely to boost early clearance of income tax refunds.
“Electronic filing of returns will ensure quick and timely refunds,” said a senior income tax department official, handling the systems work. He said once the return is processed electronically, the system generates the refund due automatically.
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He said the number of e-returns filed this year has already crossed six million, indicating the total number might even double to over 18 million from 9.1 million last year. The total number of income tax returns filed in 2010-11, both electronically and manually, was 29.6 million, he said.
The spurt could be gauged from the fact that 5.3 million returns had been filed electronically for 2011-12 assessment year till July 31 as compared to 2.2 million returns filed during this period last year.
“This would mean the number of returns electronically processed at the centralalised processing centre (CPC) Bangalore, would go up from 10 million last year to 20 million this year,” the official said, stressing that substantial number of paper returns would still come in the next few years.
The department is also in the process of establishing two regional processing centres (RPC) at Manesar, Haryana, and Pune to expedite the shift to electronic processing by tackling the paper returns.
He said that CPC Bangalore had been by far one of the most successful examples of both PPP (private public partnership) and MSP (managed service provider) model. The responsibility of providing hardware and software is that of the vendor and the department pays on the basis of per return processed. The whole work is accomplished by the department with assistance from others.
The department has already expedited the clearance of refunds in the current financial years, which has impacted the direct tax collection substantially.
Net direct tax collections in the first five months (April-August) has been Rs 96,738 crore, down from Rs 100,113 crore in the same period last financial year on account of an increase of 156.04 per cent in tax refunds, which stood at Rs 57,622 crore as against Rs 22,505 crore last year.
