It could mean the end of certain income tax officials releasing your tax refund only after youve paid up.

From October 1, the I-T department is crediting tax refunds directly to the bank accounts of taxpayers.

The Central Board of Direct Taxes that governs the department has said refunds should be transferred directly from the departments online system to taxpayers accounts. The idea is to reduce direct interaction between assessment officers and taxpayers.

Taxpayers will now have to mention their account numbers when they file returns. Until now, getting the refund directly credited to their accounts was one of the options available to assessees. It will now be the norm.

Chief Commissioner of Income Tax, Mumbai, R.K. Singh said the system would be put in place gradually and those who have already opted for refunds through cheques will continue to receive them by post.

I-T officials said the new system would not only reduce their workload but also save taxpayers the trouble of running to department offices for refunds. Every year, there are complaints that some assessment officers are intentionally holding back refunds and asking for a cut to release them, said a senior I-T official, requesting anonymity. He added that officials often demanded 10 per cent of the refund amount as their share.

Now, the assessment officers job ends at processing the returns. Then, the system automatically calculates the refund amount and instructs the bank to transfer this to the taxpayers account.