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E-File Income Tax Returns for speedy refunds

The Central Board of Direct Taxes has promised speedy refunds to encourage electronic filing of tax returns.

E-filing, which was formally launched on October 13, 2006, is mandatory for companies but still optional for individuals.

Taxpayers who file their income-tax returns electronically will get their refunds within a month’s time.  Usually, the wait for refunds in the case of physical tax returns ranges between 5-10 months.

There were about 40 lakh refund cases pending with the tax department as on December 31, 2010.  Last year, a Comptroller and Auditor General report had stated that it takes around 10 months for a taxpayer to get his refund.

The verification of the paper tax returns filed is a tedious process that also delays tax refunds. This has become a bigger issue with the rising refunds. In 2010-11, the department had refunded tax of Rs 78,000 crore.

The income-tax department has been trying to make refund process faster and efficient through the use of technology interface. A refund banker scheme is also  in place  to ensure that taxpayers get refunds well in time.  This will also help the department begin with a clean slate when the new direct tax code comes into effect from the next financial year 2012-13.

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