This is a story that I heard a long time ago. A government office decided to computerise so that it could save precious space.
After the job was implemented the head of the division was asked whether the files could be destroyed.
The bureaucrat said, "Yes, go ahead. That was the very purpose of computerisation. But before destroying them, take photostats."
I thought this was a joke. Little did I realise that such bureaucrats exist in flesh and blood.
The other day, I was browsing through the Income Tax Department's website and came across 'Scheme for Electronic Furnishing of Returns of Income'. I was extremely happy that the department had at last taken a step in the right direction, though belatedly.
However, my happiness was short-lived. The rules state that electronic return of income may be furnished under this scheme. Thereafter a paper return should be filed within 15 days!
In case of a mismatch between paper return and the corresponding data submitted electronically, the information on the paper return will be taken as authentic.
I am afraid India will take ages to understand and adopt the full power of electronic processing. Be that as it may, let us go through all the salient features of this scheme that will certainly have a good impact upon salary earners.
Salient Features
The scheme is available to an individual who:
a) derives income from salary but does not have income under 'business and profession
b) has been allotted a PAN and
c) is assessed or assessable at one of the following cities -- Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai.
This is irrespective of whether his last return was filed at any other place. An 'eligible person' can opt for this scheme even if he was earlier not assessed in any of the 'specified cities'.
Persons who have applied for PAN but have not been allotted one should first obtain one. Under the new procedure for allotment of PAN card, an application can be made to UTI Investor Services Ltd, which will then issue it in a time bound manner.
Incidentally, UTIISL may start issuing PANs on an urgent basis, if the applicant, specially an NRI, so desires.
The scheme is optional. An individual, who has filed a return under this scheme for one year can opt out of it in later years. It is not mandatory to file a revised return under this scheme, if original return is filed as an electronic return.
A revised return can be filed only if the original return was filed under the scheme and has not been assessed by the department till the date of filing the revised return.
Even an employee having income under head house property, other sources, capital gains etc, can file his returns under the scheme.
The data has to be furnished through an intermediary (normally, the employer), who will transcribe the data and submit it online to the department, and also will submit the paper return to the ITO in due course.
The CBDT will authorise a company to act as an intermediary if it possesses financial capacity, physical and information technology infrastructure, and experience in the field of providing financial services.
Employees have the option of furnishing a prepared return to the intermediary, or getting the return prepared by the intermediary. The relevant documents supporting income, eligible deduction, rebates, etc, must also be furnished.
The due date for filing of return is same as the one under Section 139(1).
The department will issue a provisional receipt online to the intermediary immediately on successful online transmission of data of the return in electronic format from the intermediary.
Thereafter, the intermediary has to file a paper return within 15 days. If it is received within this period, the date of issue of provisional receipt will be deemed to be the date of filing of the return.
If it is submitted after 15 days, the date of filing the paper return will be considered the date of filing of return. The intermediary acts in the capacity of an agent of the taxpayer.
Therefore, it has to be ensured by both of them that the electronic return is filed before the due date. If it is filed after the due date the relevant provisions relating to late filing of returns shall apply.
Delay in filing of the return after the data is handed over to an intermediary is an issue between the taxpayer and the intermediary.
The electronic data is accepted after necessary validation checks. Once the department has issued the provisional receipt, the return will be accepted under this scheme.
Returns cannot be filed under the scheme if:
- There is no PAN or incorrect PAN has been quoted;
- Return of income is furnished under Section 158BC;
- A revised return of income where original return has not been filed under this scheme.
The advantages to a taxpayer for opting to file his return under this scheme are claimed to be:
- No interface with the department at the time of filing of returns.
- Refunds shall be processed on priority and issue of refunds, within a month of the submission of paper return.
I have serious doubts about this claim.
The assessee should have a bank account in the same city where the e-return is being filed.
The taxpayer will be responsible for any mistake or omission in the paper return though the intermediary is expected to ensure that there is no error in the data entered vis-à-vis the paper return.
All documents normally required to be filed with the return, such as salary certificate, copies of challans for pre-paid taxes, etc., are an absolute necessity.
Pensioners are eligible to file returns under this scheme if they fulfill the other conditions.
Taxpayers can use any of Form 2D (old Saral), Form 2E (new Saral) or Form 3.
The returns filed under this scheme may be selected for scrutiny in the same manner as returns filed otherwise.
The data transmission is an online process assisted by web-based application. The employee or the intermediary can use freeware software called Sampark, available at the website of the department at www.incometaxindia.gov.in.Powered by 
