Income tax returns may have pre-filled mutual fund gains information
August, 20th 2019
The revenue department is in talks with Sebi to work on a mechanism after which retail investors can file their own returns, instead of approaching Chartered Accountant.
From next year onwards, taxpayers may not have to worry about calculating the capital gains liability while filing their income tax returns (ITR). The revenue department is in talks with the market regulator Sebi (Securities and Exchange Board of India) to work out a mechanism under which long-term and short-term capital gains on mutual funds (MF) and shares can be worked out.
This is expected to help several retail investors. Now instead of approaching Chartered Accountant to do the calculations, they can file their own returns. Along with this, items such as dividend income may also be included, according to a senior official.
The government is also looking to include the interest which is earned across bank accounts into the pre-filled forms rather than confining it to the bank account. With banks have access to Aadhaar number of most of the taxpayers and their unique identification number is linked to PAN (permanent account number), the centre believes the architecture is in place to ease the compliance burden on individuals. Many of the taxpayers need to rush to the bank branches to update their passbooks in order to calculate their interest income, according to a report in the national daily.
"Once this happens, it will truly turn tax compliance running on technology and ultimately bring in ease, efficiency and transparency, benefitting both taxpayers as well tax authorities," said Kuldip Kumar, leader and partner, personal taxes at consulting firm PricewaterhouseCoopers (PwC).
In order to simplify the tax filing system, the government has introduced pre-filled tax return forms. The government believes that it has now been stabilised, previously, many taxpayers had concerns about the forms.
Starting from this year, ITR-1 is coming pre-filled with details such as salary, interest earned from fixed deposits (FDs) and tax deducted at source (TDS). Previously, individuals were required to enter these details manually. However, the details of a large number of other taxpayers are currently not coming in pre-filled format. The scope of these forms is to be expanded over a period of time, as the centre gets more data on taxpayers.
"Providing pre-filled return forms with such detailed information will really help taxpayers to simply confirm and file the returns quickly, where there is no discrepancy. However, where such pre-filled details are incorrect, changes may be made before filing the returns," Kumar further added.