E-filing to Benefit Tax Payers Having Income Above 5 Lakhs

The move by Finance Ministry to reduce the threshold limit of filing e-returns from Rs 10 lakh to Rs 5 lakh has to be welcomed. E-filing of return should not be seen as a burden but it is in one way a step ahead for the tech savviness of the country. The primitive approach of filing manual returns had many flaws and the Government’s recent move was to eradicate the flaws of filing income tax. Finance Minister on 5^thMarch 2013, made it mandatory for tax payers with annual income of more than Rs.5 lakhs to file e-returns.

Earlier this limit was Rs 10 lakhs but after due consultation between policy makers the same has been revised. Only from last year the government had commenced the system of e-filing for tax payers. There are approximately 19 lakh tax payers in the tax slab of Rs 5 lakhs to 10 lakhs in India. Last year, about 17 lakh tax payers filed their tax returns through electronic mode. This means that a large portion of tax payers are already using this system.

The rise in electronic filing by the assesse is a welcome change India is experiencing. The E-filing of returns is covered by Section 139C and 139D of the Income Tax Act, 1961. There are considerable benefits for filing a return in e-format. Even if the person doesn’t come in this tax bracket, which means his income is below Rs 5 lakhs it is advised that he should file his returns electronically. Some of the advantages of filing an e-return are as follows:

Acknowledgment and Processing

The acknowledgement of Income Tax returns is faster than in traditional mode of filing the ITR. Processing is faster as the manual interventions are pretty lower and this makes refunds gets processed in a much efficient manner.

Confidentiality

The most important advantage of the income tax assesse is its confidentiality of documents. While paper trading did not provide the same as the important information could not be kept away from records, this is possible in the case of Electronic filing as the filtering of such information can only be through one channel that is Assesse.

 Accessibility of data

Past records of the taxes can be easily accessed with the help of E-filing. The same can be used at the time of filing taxes and for your subsequent returns. The software now a days is capable of recording ‘n’ number of records in its domain.

Accuracy

Accuracy is the key in filing a return. You may be liable for certain amount of tax but due to manual processes you can end up paying either higher or lower amount. Through e-filing you can take the help of the software whenever required, although there are chances of punching error but the accuracy percentage is much higher compared to paper filing.

Limitless boundaries

The 24*7 availability and comfort of filing return and lack of boundation from where to file it is another merit of the e-filing. Earlier there used to be huge queues for filing of returns and a person had to waste his time and energy in submitting the document in the income tax department. E filing intercepts wastage and time consumption. The person can file his electronic return from anywhere in the country as well as outside.

Advantages to Government

Government is in serious mood to plug the loopholes in Indian Income Tax system. One way is the introduction of technology. The Income Tax payers usually complained about the problems faced by them of the lead time relating to refunds. Most of them don’t even get the refunds even if they are rightful candidates for the same. Apart from this, huge piles of paper work by Income Tax department has made it a slow moving entity. The transparency is lacking and there are problems to grease the palm at every step. E-filing removes these demerits and improves the functioning of the system.

Plenty of softwares are available in the markets for e-filing of return. In case of difficulties,people can approach  professionals like CA, tax advocates who charge a fee but take care of filing the returns on behalf of Assesse. One can do it himself by the income tax filing guide available on the web. The purpose of e-filing is to get faster refunds. The measure of government asking to file e-return for persons having an income above Rs 5 lakhs is a brave step towards speedier returns and less paper work that was getting irritating for many Assesses over the years.

Source: InvestmentYogi is one of the leading personal finance websites in India