NRIs should file tax returns online to ensure refunds

'NRIs should file tax returns online to ensure refunds'

By GOPAL SUTAR | ARAB NEWS

Published: May 29, 2011 02:05 Updated: May 29, 2011 02:05

BANGALORE: The Indian financial year from April 2010 to March 2011 has ended and filing of income tax return, a cumbersome issue for both resident and non-resident Indians (NRIs), is in the forefront again. The worst is the waiting period involved in getting the refund from the government for the excess tax paid by the honest taxpayers. The delay in issuing the refund money for various administrative reasons has been the bane of the system for the last several decades. But all this could change for the better in the case of those who choose to file their returns online simply because the government plans to process the electronic claims on priority - as it is easy and fast - and send the refund within a month or so.

The physical process takes around 10 months that too if everything goes well and certified as "clear cases" by the officials. Now the Central Board of Direct Taxes (CBTD) wants to change its image and encourage electronic filing for early settlement of cases through expeditious refunds. Online filing is particularly good for NRIs who pay income tax in India for their earnings generated in India through property, local bank deposits, businesses, investments in stocks, etc. With the click of a mouse they can now help themselves, their kith and kin in filing tax returns by logging on to https://incometaxindiaefiling.gov.in/portal/login.do
Launched in October 2006, e-filing is mandatory for companies but has been optional for individuals. The verification of the tax returns filed on paper is so tedious that nearly four million refund cases were pending with the tax department as on Dec. 31, 2010. Also, when people resort to physical filing, it costs the government in terms of extra employment, as claims too have to be physically verified and then entered into the system. The manual work in part delays the refund process and further compels the government to pay extra as interest has be worked our for a period the refund is delayed or retained. For example, Indian government refunded extra tax of Rs.780 billion for the year 2010-11 alone because of the delayed processing of cases. According to CBTD charter, excess tax along with the interest should be refunded within nine months in case of manual filing and in six months if the return is e-filed. However, the manual filing cases take a much longer time. The other advantage of the e-filing is one can avoid corrupt officials and frauds related to the refund system.