CA Animesh Singi

Animesh

First of all, I should be sorry to write this blog very late i.e. on the last date of e-filing of return of income. If it would’ve written much earlier, then it might have save so many salaried employees to fall into the alluring trap of websites offering free e-filing services. This article is written in order to give common peoples an understanding about the flaws and vulnerabilities of e-filing their tax returns freely or on some payment from websites offering such services. Now a days there are plenty of  websites such as Clear Tax, TaxSpanner, H&R Block, and MyTaxCafe offering free income tax return filing. Due to paucity of time, I am constraining this post to my experience which I noticed during my recent e-filing with one of such website.

This website has a nice and clean user interface which lets you to file return of income hassle free. Being a Chartered Accountant I can file return easily through the utility released by the CBDT, but my insider curiosity took me to this website. I simply took the salary return and started e-filing through this website. As of now, presently in order to e-file ITR every assessee has to Login in to Incometaxindiaefiling.com using unique User ID (i.e. PAN no.), DOB and Password.

While doing e-filing through that tax website, Initially I thought they would ask me my User Id/Password to e-file my return of income, but they asked me only Primary details such as (Name, PAN, DOB, email Id and Phone No.). I filled up rest of the details such as Bank Account No., Income details and finally proceeded towards conclusion stage. Thereafter website showed me the Green Button to e-file the return of income, I pressed the same and my return got filed. The most vulnerable thing which sought my attention here is that my ITR got filed without asking me any security questions or passwords. Even I have not received a single OTP or alert message before the e-filing of return. During the whole process, I noticed that a person having PAN no. and Date of Birth can e-file the return of income without passing any security gateway. I understand concern of e-filing websites to provide glitch free platforms to common people for return filing, but at the same time they should not forget the security issues while providing such services. Details like PAN card copy is now a days available with so many people, as person needs to file the same on various documentations and KYC as a proof. My only concern here is to bring everyone attention that, third person or stranger having your PAN details can e-file your return of income without your approval through such websites. Moreover, in order to test the security level of such websites, while filing ITR, I used different email id/phone no. on website i.e. other than Primary contact details which is in my Income Tax Records. Surprisingly this has also cleared the weak security gateway of this website.Someday a person involving in pernicious practises might use database of PAN available with him and cause a great harm to tax payers.  Whole chronology of eventsshows up the biggest flaw at the end of website and Income Tax Department who permitted such websites to e-file return of income publicly. Ignoring confidentially of tax payers and allowing such websites making the whole Login ID and Password system otiose. Some other flaws and issues which I noticed on such websites and portals are as below:

1. There is no option on this Tax website to provide Interest income earned from Saving Bank and Fixed Deposits separately. Either I can show Interest income from saving bank or either from Fixed deposits, both cannot be shown together in separate rows.

2. These e-filing websites are also offering services such as fetching data from Scanned Form-16. Users must recheck the figures extracted from the Form before filing. Even sometimes their utilities failed to observe conspicuous errors from Form 16. These websites might give you user friendly atmosphere and ease of access without charging any money, but they will not advise you or do your tax planning or financial planning at free of cost.These websites don’t have any inbuilt program, to scan your pay structure and restructure your CTC in order to get maximum pay and minimum tax.What I mean is that these portals don’t suggest investment opportunities available to users to save their tax liabilities.

3. On many instances I noted that, employer filed TDS returns erroneously which results into incorrect figure or lesser deduction to employee in Form 16 generated from TRACES website. Online websites are fails to point to out any such mistakes hidden in these Form 16. For an example, one of my client came with Form 16 to e-file his return of income, he was simply relying on the certificate issued from employer and thought that whatever the actual tax due on his income has been deducted as TDS and he don’t need to pay anything or expect any refund. On perusal of his Form 16 and further enquiries with assessee, I noticed that he has received leave encashment on retirement which was eligible for deduction u/s Section 10(10A), but his employer failed to allow the same in Form 16. Thus at last I filed his return of income claiming the same and filed return with the refund of excess tax deducted by his employer. My only purpose to produce this example here is to make people understand that these websites might provide services electronically at free of cost, they cannot ensure such immaculate and impeccable filing of ITR which a Tax advisor or a CA in Practise will do.

4. Unlike a personal chartered accountant who is available as per your needs, clarifications needed from these websites are available mainly through emails, which might be a time-taking affair. In my personal experience apart from ITR filing, though out the year person has to communicate with CA before entering into any financial transaction or making any investment or for submitting proposed income tax declaration to employer, which seems not possible with these websites.

At last before concluding my post, I would say, although these portals and websites seems easy to browse and file, remember the information you submit to these websites are highly confidential. These websites should really do something to assure the confidentiality of return filing and provide more secured atmosphere. Filing a return of income only with PAN card details and without asking for confidential information of the user are making these websites vulnerable. Therefore, before subscribing to any of these portals, take steps to ensure that the safety of your data. Moreover, check that the online portal is duly authorised E-Return Intermediary (E-RI) for the confidentiality of data.I appreciate the efforts of the e-filing websites to help peoples using technology, but at the same time I would never expect delicate security in such crucial matters.

Thank you !

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  • S Balasubramanian

    To put it in a nutshell, if you are not yourself directly logging into the incometaxindiaefiling.gov.in site, DO NOT FALL for free incentives. Your personal data can and will be stolen.

  • Vidyadhar Swami

    Hi Mr. Animesh Singi…

    कहीं धुँआ सा उठता नजर आया.
    In fact, Mr. Singi, what happened, from the years unknown, the caste of CAs and other professional accountants have been looting the ignorant taxpayers and returnfilers but these newly born free e-filing portals have now significantly cut that share of these so called advisors or wellwishers of taxpayers. So the pain is obvious.
    होता है यार. Take it easy.

  • GANDHI MOHAN BHARATI

    Very Interesting article. But the basic questionis why our IT Department does not make efiling of ITR 1, ITR 2 & ITR 2A easier for common man on the efiling website. Atleast ITR 1 is easier without having to go through XML and other stuff..
    Now that everyone who has income above Rs.2,50,000/- has to file ITR whether one is taxable or not combined with a Flat fine of Rs.5,000/- for not doing so, considering the level of computer savvy persons, the Govt needs a rethink. I sometiomes wonder whether they are bent on enhancing the income of the Tax Filers – by whatever name you call it.

  • CA. S.C.Podder

    Good , Thank you.

  • CA. S.C.Podder

    Good, Thank You.

  • Sekaran

    The article is an eye opener to all gullible e filers. Best route is to e file through your net banking web site which is PW checked while logging into your bank account.That itself is a security check. Don’t trust all kinds of Fin Advisors and On line auditors.
    Secondly I thought that the writer also would highlight the common mistake for which ITRs are senrt back for correction etc by the CPC.Technically netbanking is also a free website only!

  • TeachingWays Academy

    I think you need to get your basics right. As far as I know, the tax filing is not complete until you visit Income Tax department website and complete the e-verification process. Though these websites provide efiling services, but ultimately it is you, who need to approve it through e-verification.

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