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Budget 2021: How Income Tax e-filing has changed over the years

The range of changes in the income tax system has allowed the taxpayers to complete the filing process within minutes without any hassle.

January 29, 2021 / 09:06 AM IST

Various steps have been taken by the Income Tax Department over the past few years for simplifying the ITR filing process, from the launch of a separate portal for the online filing of income tax returns to the simplification of forms.

The range of changes in the income tax system has allowed the taxpayers to complete the filing process within minutes without any hassle.

The IT department has also made it mandatory for individual assessees, with the exception of senior citizens, to file their income tax returns online. The number of returns filed online has increased multifold.

Here are some changes to Income Tax e-filing over the years:

-The e-filing system was launched in 2006 as a pilot project and was developed and expanded to individual assessees over the years.


-The e-filing scheme has benefited the taxpayer and Income Tax Department alike that was aimed at enabling the taxpayer to submit documents to the authorities through the internet or direct connection.

-The returns can be filed from anywhere, faster processing of return and the issue of refunds, and easy excess of past data online are some of the key benefits of the e-filing project.

-On voluntary basis, the e-filing of income returns was introduced in September 2004 and was made mandatory from financial year 2006-07 for companies and other taxpayers whose accounts were required to be audited.

-The Income Tax Department introduced two simpler income tax return forms for individual taxpayers from the financial year 2010-11. The form ITR-1 (Sahaj) was meant for salaried individuals, the form ITR-4S (Sugam) was interned for small business taxpayers falling within the presumptive taxation category.

-To track the status of refunds and credit for prepaid taxes including an online facility, the taxman subsequently took a number of measures towards efficient tax administration, including an online facility for taxpayers.

-The taxman launched TRACES or TDS Reconciliation, Accounting and Correction Enabling System to serve as an integrated one-stop platform to facilitate TDS operations in the financial year 2011-12.

-The taxman made it compulsory for individuals and non-corporate assessees earning more than Rs 5 lakh a year to file returns through the e-filing process. In other words, manual filing of ITR was no longer available for these assessees in the financial year 2012-13.

-In ITR forms, the disclosure of assets and liabilities for individuals whose income exceeds Rs 25 lakh was introduced.

-The taxman started crediting the income tax refunds directly to the taxpayers' bank accounts through the Electronic Clearance Service (ECS), discontinuing the practice of remitting cheques by post from the financial year 2013-14. Now, you get the refund directly credited in your account within a month of filing return... The digital transfer and timely payment of refunds emerged as the biggest positive step to encourage the assessees to file income tax returns.

-The Income Tax Department launched a national website with enhanced features and content.

-The electronic tax credit statement - or Form 26AS - contains details on payments involving tax deducted at source (TDS) by the taxpayer. Previously, the 26AS was only available in physical form.

-Electronic verification code (EVC) was introduced as an option instead of sending ITR-V (by mail) to Centralized Processing Centre (CPC) Bengaluru, in order to simplify the process of verification. Aadhaar number and net banking can be utilised for generation of EVC from the financial year 2014-15.

-The Income Tax Department presently offers seven forms to the assessees for filing their income tax returns, and one form - ITR-V - for electronic verification.

-To reduce the compliance cost for assessees, especially small taxpayers, the taxman expanded the "e-Sahyog" pilot initiative in 2016. To resolve mismatches in ITRs without requiring taxpayers to visit the income tax office, the project was aimed at providing an online mechanism.

-Due to heavy traffic on the last day of submission, the income tax portal has often got temporarily jammed in the past few years.

-The Income Tax Department launched a "lite" e-filing facility on its e-filing portal, aimed at easing the filing of returns in August 2019. It provides essential links for e-filing ITR and 26AS (for TDS) forms and it is a lighter version of the portal.

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Moneycontrol News
first published: Jan 29, 2021 09:06 am
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