New Delhi, Aug 23 The Central Board of Direct Taxes (CBDT) has initiated dialogue with public sector banks (PSBs) to rope them in as ‘refund bankers’as part of its attempt to put in place a quicker and transparent income-taxrefund process across the country.
Refund Banker is a scheme wherein a scheduled bank is authorised to issuerefund instruments, either in paper form or electronically, on behalf of theIncome-Tax department.
Under this scheme, assessees benefit from faster tax refunds and direct credit into their bank accounts on the lines of dividend payments made bycorporates to shareholders. State Bank of India (SBI) is already operating as the ‘Refund Bank’ for theIncome-Tax department in Delhi, Patna, Chennai, Mumbai, Kolkata andBangalore.
Roping in more bankers
Official sources said that bringing in more banks could improve theefficiency of the entire process and also help expand the services to morecities. The CBDT wants to better the turnaround time for the entire process andhence is looking to bring in more banks.
“The refund banker scheme can become more effective if more and more taxpayers opt for direct credit of refund to their bank account through Electronic Clearing Service (ECS), which is accurate, efficient andcost-effective” , a CBDT spokesperson told.
The CBDT official, however, noted that only one-third of the taxpayersgetting refunds through the ‘refund banker’ scheme receive direct credit and the remaining two-thirds get refunds by cheque from the refund banker.
A large number of taxpayers in these six cities have not still opted for the direct credit option. So far, about 4.2 lakh refunds for about Rs 540 crore had been issued during2007-08. The tax department had in all issued about 48 lakh refunds during 2007-08.No pre-funding Another feature of the refund banker scheme was that the department doesnot do any pre-funding of the refund amount. SBI is now disbursing theamount before claiming it from the Government.
A CBDT official said that almost 98 per cent of the grievances relating torefunds arise from non-corporate (individuals) assessees.
