Authorities are working on a project that will use data available from entities that deduct tax at source to offer pre-filled ITR forms to make ITR filings simpler, says CBDT chairman Sushil Chandra

The process of filing tax returns will soon become a lot easier, with the tax department planning to introduce pre-filled fields based on information already available with it, cutting out the tediousness of this annual chore.

Data available from entities that deduct tax at source such as employers and banks would be used to offer pre-filled tax return forms to people, Sushil Chandra, chairman of Central Board of Direct Taxes (CBDT), said, adding that work on this project was on. A pre-filled return could be submitted directly or after modification, he said.

The new form is aimed at encouraging people, who are daunted by the complexity of the process, to file their taxes. It’s also part of the department’s efforts to present a taxpayer-friendly interface and give officials fewer discretionary powers.

The move also shows the intensive data gathering the department does from third parties to profile assessees and reduce the risk of tax evasion.

“About 80-90% of taxpayers have only salary income and very few have other sources of income. Offering pre-filled income tax return forms will increase compliance and lessen the burden on small taxpayers,” said tax expert Abhishek Goenka.

Those who just have their taxes deducted at source, therefore, may not need to hire the services of a tax professional for filing returns.

Chandra said there is no discretion in selecting cases for tax scrutiny. The department has managed to limit cases taken up for scrutiny to less than 0.5% of all returns filed. “This year, a large number of cases were chosen for e-assessment. So far, 70,000 cases were assessed electronically without calling the assessees to offices,” Chandra said at an international tax conference organized by lobby group Confederation of Indian Industry.

In a year, CBDT would also start issuing electronic PAN (permanent account number), he said. That would reduce the time required to obtain the tax identification number to just four hours, he said.

The department has received 60.8 million tax returns this year, which Chandra said, was 50% more than that of last year by this time. Gentle persuasion by way of text messages and emails, as well as penalty for filing after the 31 August deadline, led to the surge in filing. In 2017-18, a total of 68.5 million tax returns were filed.

Taxpayers can file returns for 2017-18 till March 2019 with a fine. If filed after the 31 August deadline but before the end of December, the fine is ?5,000, which will double if filed afterwards till March 2019. The number of tax returns filed by corporate entities had also increased to 800,000 this year from 700,000 in the previous year, Chandra said.

The department had collected nearly half of its full-year revenue target of ?11.5 trillion so far this year, Chandra said.