The Prime Minister of India, Narendra Modi had launched a platform for transparent taxation in order to strengthen the government’s direct tax reforms. Under the reforms, the IT department had presented the pre-filled forms with the purpose of making the procedure of filing tax forms much easier.

The Pre-filled Income Tax Return (ITR) forms are going to be available for taxpayers. This measure has been adopted in order to make the tax compliance convenient for the individual taxpayers, as notified by the Finance Minister, Nirmala Sitharaman.

It intends to make the filling of the IT returns easier as well as encourage more persons to disclose their incomes, and deliver better transparency in the procedure.

Presently, the Income Tax Department has started towards conducting all the communication related to assessment, investigation, as well as redressal through a Document Identification Number (DIN), which is computer generated.

The Income Tax Return Form will now have more pre-filled details which include the salary income column. Previously, some of the fields were used to be pre-filled in the IRR forms for 2019. There are many types of salaries that the IT Act 1961 takes into consideration, comprising salaries, income from businesses or professions, house property, capital gains, and income from other sources or the residual income.

The date for filing Income Tax Return for the financial year 2019-2020 has been extended till 31st December for taxpayers. Also, the deadline for Aadhaar-PAN linking is also extended till 31st March 2021, by the Income Tax Department.

Linking the Aadhaar card, PAN card and bank accounts allowed the tax department to pre-fill the forms for individual taxpayers. The facility had further been extended to make certain the bulk of the details for example bank interest, salaries as well as tax deductions are automatically filled in the form which could be submitted when approved by the taxpayers.

It is expected that with the pre-filled form, the probabilities of errors while filing taxes would get reduced substantially. Also, through making PAN and Aadhaar linking compulsory, the IT department has all the details of almost every financial transaction commenced by the individuals and companies which reduces probabilities of tax evasion.

Conclusion:

Thus, it could be said that the ease of filing taxes with this pre-filled form may encourage taxpayers to disclose their incomes. The taxpayers are now aware of the extent of data accessible with the income tax department, there is more possibility that they will reveal the correct incomes and not misrepresent in order to save tax.

While this is a welcome initiative, but also, there can be some issues initially. The individuals could check all pre-filled numbers with those in Form 16, 26AS, SFT reporting, etc. There is an option provided to taxpayers to change the details which are not pre-filled or for any mismatch.

The above initiative would eventually reduce the dependency of taxpayers and small taxpayers on experts as well as consultants towards assisting in completing the Income Tax Return Form. This would also help the tax departments as income and taxes reported would be accurate. The information collected from various authorities shall be available to tax officers and the individual taxpayer would be less loaded to provide and confirm such details.

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