The introduction of pre-filled returns is yet another milestone in this direction. In order to make the tax compliance process more convenient, pre-filled income tax returns (ITR) will be provided to individual taxpayers
by the Income Tax Department.
by the Income Tax Department.
The ITR form, downloaded from the e-filing account of individuals, would now contain pre-filled details of salary income, house property income, capital gains from securities, bank interests, dividends, etc. and tax deductions. Information regarding these incomes will be collected from concerned sources such as banks, stock exchanges, mutual funds, EPFO, State Registration Departments etc. PAN will be used to pick the details from Form 26AS, the TDS return filed by payers and also the previous year’s ITR.
To enable pre-filling of return of income, the scope of furnishing of statement of financial transactions (SFT) has been widened to obtain information by mandating furnishing of statement by certain prescribed persons other than those who are currently furnishing the same and remove the current threshold of Rs 50,000 on aggregate value of transactions during a financial year. The correct furnishing of information in the SFT has been ensured by amending penalty provisions and widening the scope of penalty to cover all reporting entities.
The above initiative will reduce the dependency of individual and small taxpayers on experts and consultants to assist in completing the ITR form. This will also help the tax authorities as income and taxes reported will be accurate. The information pooled from various authorities would be available to tax officers and the taxpayer would be less burdened to furnish and verify such details.
While this is a welcome initiative, there could however be some teething problems initially. Taxpayers should check all pre-filled numbers with those in Form 16, 26AS, SFT reporting, etc. An option has been provided to taxpayers to modify the details which are not pre-filled or in case of any mismatch.
