Indians are the most eco-friendly consumers in the world, according to a recent survey conducted by the National Geographic Society. However, we are not very considerate of our environment when it comes to filing tax returns. An estimated 27,500 trees are cut down every year because only 16 per cent of the 3.26 crore tax assessees e-file their tax returns, while an overwhelming 84 per cent take the physical route. In the US, more than 70 per cent of the tax returns are filed online.
There are several reasons why 2.74 crore assessees prefer to fill out tax forms physically and then stand in serpentine queues to submit their returns. For one, the penetration of computers and accessibility to the Net are very low in certain parts of India. However, even in large metros, only 30-35 per cent of the returns are filed online. In Delhi, where almost every upper-middle-class home has a broadband connection, less than 6 lakh of the 22 lakh assessees file their returns online.
The real problem, it seems, is not poor Internet access or nonavailability of PCs. It has more to do with the mindsets and misconceptions that taxpayers harbour about e-filing. We debunk some common myths so that readers may feel encouraged to use this easy, efficient and eco-friendly mode of filing their tax returns.
Myth: I'll need a digital signature to be able to e-file my tax return.
Reality: You need a digital signature only if you want to file your returns completely online. You won't need one if you e-file your return and then post a signed ITR V form to the income-tax office in Bengaluru. The new rule, which requires a taxpayer to send the ITR V by post, has made the submission process very convenient.
Myth: There is a greater chance that ereturns are picked up for scrutiny.
Reality: Returns are scrutinised at random and the selection procedure has nothing to do with their being filed online or physically. In fact, there is a greater probability of a physically filed return inviting scrutiny. The information filed in physical returns is ultimately fed into the computer by operators. If there is a typing error in this process, the discrepancy is captured by the computer and the taxpayer can be served a notice. On the other hand, e-filing portals reduce the chances of errors because the tax is calculated as you fill in the form. If the end result is different because of a typing error, you can go back and rectify the mistake.
Myth: My tax and income details are not safe if I file the return online.
Reality: All registered e-filing portals send the tax returns uploaded by assessees to the Income Tax Department. The government Website uses the latest software to make it fully secure. There is very little chance of it being hacked.
Myth: Why should I pay? Physical returns don't cost anything.
Reality: E-filing through the government site is free of cost. Some private portals also offer free filing. Others offer various packages. Also consider the cost of your time and the environmental cost that Mother Earth pays for every return that is filed physically.
Myth: The ITR V may get lost in transit or reach the Bengaluru office late.
Reality: Though the ITR V form has to be sent to the Bengaluru office by ordinary mail, there is very little chance of it getting lost in transit. The CPC is supposed to send you an acknowledgement within 8-10 days of receiving it. Ankur Sharma, director of e-filing portal Taxspanner.com, advises e-filers to wait for 8-10 days before sending another ITR V. There's no need to panic because one has to submit the ITR V within 30 days of e-filing. However, if your ITR V doesn't reach Bengaluru in 30 days, your ereturn will be void and you will have to file a revised return.
Myth: I won't be able to revise my return if it has been e-filed.
Reality: E-filed returns can be revised in the same way as those filed in any other manner. All efiling portals allow you to file revised tax returns. Now that you know the truth about e-filing, make sure you do your bit about protecting the environment this year.
Cost of free filing
If you are among those who agree to a Website's privacy policy without reading it, it's time you took a closer look. For, the information you give out in the tax return is priceless. Marketing executives from the financial services sector will give their right arms to know how much you earn, save, spend and where you invest. Many of the portals that allow you to e-file your returns at no cost state explicitly that the information may be used by their associates or passed on to third parties. Here's a sample: "The information you provide may also be used for promotional, analytical and statistical purposes.We may share your information with other members or marketing partners." Once the details reach the telemarketing firms, you will be bombarded with calls and spam.
