The income tax department is planning to integrate the forms for filing fringe benefit tax (FBT) and income tax returns into a single form.
The change, which may be announced in a week or two, is expected to be a part of the new tax return form for assessment year 2007-08. As a result, Form 3B, announced last year for filing FBT returns, may become redundant.
The authorities are also considering scrapping the present practice that requires assessees to file separate challans for income tax and FBT. Instead, a single consolidated challan (a statement that is submitted along with actual tax payment at banks or state treasuries) may be introduced, income tax sources said.
The income tax department has advised all taxpayers to wait for the notification of the new return form and not file returns using the old one.
The moves will reduce the administrative burden of the department, banks and taxpayers.
The change would mean less paperwork for the corporate accounting department, which has complained about the additional burden imposed by FBT provisions.
A single challan system is also likely to reduce the instance of tax refunds since adjustments will be allowed. A single tax challan will simplify tax payment and reduce complications arising out of separate filings, said G Ramaswamy, fiscal committee chairman, Institute of Chartered Accountants of India.
In Budget 2007-08, the finance ministry had proposed that payment of advance tax on fringe benefits be done on the same dates as for income tax on the 15th of June, September, December and March.