E-filing of returns to become compulsory soon

Last updated: 22 June 2021

Individual taxpayers, too, soon may have to file returns electronically.

The Central Board of Direct taxes (CBDT) is considering a proposal to make electronic filing of income tax returns compulsory for certain class of assesses. “We have taken the power to classify as to who will be filing the returns electronically and once the Budget is passed by Parliament, we will decide,” Anita Kapur, joint secretary (CBDT) said at a post Budget meeting of the Institute of Chartered Accountants of India (ICAI) on Friday.

The department hopes that the move will reduce corruption and harassment to taxpayers as well as to check any manipulation of returns by Income tax officials and assessees.

The proposed amendment in the I-T Act in the Finance Bill, 2007 empowers CBDT to make rules for the class or classes of persons who would be required to furnish the return in electronic form along with documents. However, the Budget empowers CBDT to make it compulsory for certain class of taxpayers. The board would define this class in the next few months, Kapur said.

The government had allowed e-filing of returns by indi vidual taxpayers last year. However it was done on a pilot basis, and was not compulsory.

So far tax authorities have not been very keen on making e-fling of returns mandatory for all assessees as they are of the view that it would not be possible to deal with the sheer numbers without a completely computerised tax system. E-filing of returns by all taxpayers may be made compulsory once the department is fully computerised.