NEW DELHI: Imagine not having to fill up any details of dividend from mutual funds or gain or loss on equities, and interest income in your income tax return! One may soon get all those details filled in advance in one’s I-T return form; just check the details, pay tax if due, and file it.
Keen to take the prefilled return forms to the next level, the revenue department has initiated consultations with market regulator Sebi to explore the idea of getting details of investment returns of taxpayers, a government official has said. “We are in talks with Sebi…we have had two rounds of meetings already,” the official said.
This is part of the government’s initiative to bring about ease of living for taxpayers.
The official said prefilled forms will soon be able to pick salary breakup directly from an individual’s Form 16. At present, the salary breakup has to be filled by the individual, which may be confusing to some.
The current prefilled form that taxpayers can download using their permanent account number (PAN) has all the personal details, taxes paid and bank account details.
Using these bank accounts, the incometax utility will also import Interest income in all savings accounts wherever permanent account number or Aadhar is mentioned and auto-populated in the return form, the official said.
This will ensure that the taxpayer does not miss out any income and the department gets all due taxes.
This is particularly true in the case of interest income in saving accounts.
The idea, the official said, is to make it as easy as possible for a taxpayer to comply. The government has already moved to faceless assessment to cut down on physical interface between tax officials and taxpayers.
The I-T department is using technology to keep a tab on undeclared income via Annual Information Return that records various expenditures incurred above a specified threshold by an individual such as credit card spend, and investment in mutual fund.
The department now wants to use technology available for taxpayer facilitation. Tax experts say the government has been using technology to check tax leakages and now that info will come in handy to offer taxpayer services.
“So far the government has been using technology for monitoring compliance and checking tax leakages,” said Kuldip Kumar, partner at PwC. “Providing prefilled return forms with such a detailed information will really help taxpayers to simply confirm and file the return quickly where there is no discrepancy.”
At present, in prefilled ITR form 1 and 2 information of personal details, employer, tax exempt allowance, tax deducted at source details are available.
Globally, some countries such as Sweden have successfully implemented the concept of prefilled tax return form. India started the process this year to a limited extent and the idea is to take it to the next level and eventually to a stage where taxpayer would only need to verify, authenticate and submit the prefilled returns generated by the utility.