Manage your income tax refunds in a month!

E-filing, which was formally launched on October 13, 2006, is mandatory for companies but remains optional for individuals. There is an incentive for taxpayers who file their income-tax returns electronically - they will get their refunds within a month.

To speed up refunds and encourage electronic filing of tax returns, the Central Board of Direct Taxes has promised expeditious refunds.

The wait for refunds in the case of physical tax returns ranges between 5-10 months. "We want tax-payers to file electronically as that helps in faster processing of refunds," Sudhir Chandra, chairman, Central Board of Direct Taxes, told reporters.

As on December 31, 2010, there were about 40 lakh refund cases pending with the tax department. Last year, a Comptroller and Auditor General report had highlighted that it takes as much as 10 months for a taxpayer to get his refund.

Reports of widespread corruption and frauds in issue of refunds have also spurred a revamp of the refund system.

"The whole idea is that small taxpayers should not face any hardship in his interface with the department," Chandra added. Though the e-filing of tax returns is rising in absolute terms every year, its level has stagnated at about a quarter of the total returns filed.

The verification of the paper tax returns filed is a tedious process that also delays tax refunds. This has become a bigger issue with the rising refunds. In 2010-11, the government had refund extra tax of Rs 78,000 crore.

"E-filing ensures that tax payers' information on income, taxes and refunds are uploaded in the tax system instantly and tax computations are processed on a real-time basis," said Vikas Vasal, executive director, KPMG.

The income-tax department has been trying to make refund process faster and efficient through the use of technology interface.

"A refund banker scheme is already in place in the whole of country to ensure that taxpayers get refunds well in time," said an income-tax department official.

Chandra says the strategy to have a tax-payer friendly system has paid off as they have managed to collect the higher revised collection target of Rs 4.46 lakh crore in 2010-11.

Source: http://economictimes.indiatimes.com
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Saving Time and Paper – Pay taxes at your ATM!

If you owe back taxes and you don’t know how you’ll pay, you may be looking for help. Electronic payment measures will be a huge relief to such people.

The government has recently come up with a convenient way to pay your income taxes. Just walk over to the nearest ATM, pay your taxes and you are done. You don't need to fill lengthy forms or stand in queues.

It will be available 24x7 and is also saves paper. Currently the scheme has been launched to Union Bank of India customers but it will be extended to other banks soon.

As a debit card holder, you will register at the bank's website
This site is in turn linked to the National Securities Depositories Ltd, which will help validate the permanent account number (PAN) of individuals and the Tax Deduction Account Number (TAN) provided to taxpayers.

On successful registration you can go to the ATM (currently Union Bank ATM only) and access Income Tax menu

It will display his PAN number and ask for the tax amount that is to be paid along with item-wise details of any other amount the assessee may want to include in the tax payment.

On confirmation, the tax amount will be debited from the customer's account and the ATM will generate a receipt with a special number. After 24 hours, customers can log on to the bank's website, submit the special number and print a challan.

Individuals can make payments related to income tax, advance tax, self-assessment tax. If all your taxes are being paid through TDS then you need not worry about it.

A lot of people have to pay self-assessment and advance tax by the end of every quarter.

Tax Payment should not be confused with filing of income tax returns.
Tax Payment is the actual money you pay to the tax department as per your income.

If you are a salaried person and have no other sources of income then chances are that the tax is being deducted at source (TDS) and being paid by the employer.

Source: http://www.rediff.com
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