The concept of electronic filing of annual tax returns is catching up slowly and about 10 per cent of the returns are expected to be filed electronically this year, according to a study.

The study, done by leading player in online tax filing business, 3i Infotech Consumer Services, said that of the three crore tax returns filed during 20078 only 3.62 per cent or 10.86 lakh returns were filed electronically.

However, the figure went up in the subsequent year with 27 lakh returns e-filed in 20089 against total returns of 3.7 crore.

According to the company's projections, about 10 per cent of the returns could be filed electronically in the assessment year of 0910 and 15 per cent in the year 201011.

Ravi Jagannathan, Managing Director and CEO of 3i Infotech Consumer Services Ltd said e-filing as a concept was introduced in 2002 and it was made compulsory for companies from 2005.

From 2006 onwards, individuals have been allowed to file their returns electronically. He said the Income Tax Department has simplified the e-filing mode and through a recent circular has allowed use of digital signature to file tax returns that will save even the last mile physical filing of the paper-based form. Jagannathan said there are many e-filing intermediaries, many of them being chartered accountants.

There are also about a dozen companies which are running e-filing as a core activity. Individuals can go to their websites and get to calculate their taxes, generate tax return and e-file the same.

E-filing is expected to become a big business with individual taxpayers being charged Rs 200 to Rs 400 each for availing of the service, he said.

E-filing intermediaries offer different services like calculating the tax, preparing the returns, making available the facility of digital signature and fees are charged based on the service availed.

Jagannathan said the market for e-filing intermediaries is large and as per estimates over 5.5 crore tax returns would be filed for the assessment year 201011 of which over 80 lakh returns are expected to be filed electronically and the intermediaries are planning to target bulk of them.