In News:

• The processing time of income tax returns could well take only a day, as compared to 63 days now, if a proposal approved by the Cabinet fructifies.

Explained:

• The proposal is for the development of an upgraded e-filing portal that would ease income tax return filing and reduce the processing time for returns, the government announced.
• The Integrated E-filing & Centralized Processing Center 2.0 is expected to take 18 months to develop and three months to be tested before it is implemented, and an amount of Rs. 4,241.97 crore has been set aside for it. The portal will be operational for eight years
• The Income Tax Department currently takes about 63 days to process an income tax return Using the new system, this would go down to just one day
• Rectification requests, which are currently in 2% of the returns, our estimate is that this will go down to just 0.1%. That is, of the number of rectification requests today, just 5% will remain. The remaining 95% will not need rectification
• This approval has significant benefits for the Department and taxpayers through various functionalities such as pre-filling of ITR and acceptance by taxpayer as a means to improve accuracy and to reduce refund/processing turnaround time drastically, and facilitation to taxpayers in resolving outstanding tax demands
• The current version of the automatic processing system, about 23 crore income tax returns has been filed so far. He said that refunds of Rs. 1.83 lakh crore have been issued in the current financial year up to September 30.
• Earlier, taxpayers would face troubles because of delay in refund processing and the CBDT used to spend a lot of money every year as interest on pending refunds
• The decision will ensure horizontal equity by processing returns filed by all categories of taxpayers across the country in a consistent, uniform, rule driven, identity blind manner. This will assure fairness in tax treatment to every taxpayer irrespective of their status