Indian Finance ministry is preparing
a detailed plan to migrate the income tax refunds complete to the eMode.
If the Indian Finance ministry has
its way, each IT PAN (Permanent Account Number), will be linked to a bank
account. Such a linkage will be helpful for eRefund of the Income Tax.
However as on date, the above idea
has not received RBI clearance. , RBI is not comfortable with the idea of
making PAN linkage mandatory for electronic transfer of all income tax refunds.
100
per cent ECS (electronic clearance service) is possible only when IT Department
has both the PAN and the Bank Account Number.
The
tax department was not asking RBI to make PAN mandatory for all bank accounts,
said an official, "We are concerned with only those 35 million bank
account holders who have a PAN card. So it should not be a problem."
Refunds of Rs.70,000 crore have been given so
far this year. Last year, refunds stood at Rs.95,000 crore. In 2009-10 and
2010-11, refunds of about Rs.57,000 crore and Rs.73,000 crore, respectively,
were issued.
In the present mode, IT refunds are provided
through the refund banker scheme, launched in 2007, to non-corporate taxpayers
assessed all over India. The State Bank of India (SBI) is the refund banker to
the I-T department.
Refunds
are generated in two modes - ECS and paper. If the taxpayer has selected mode
of refund as ECS at the time of submission of income return, his / her bank
account number and MICR (magnetic ink character recognition) code of bank
branch and communication address are mandatory.
For
taxpayers who have not opted for ECS, refund will be disbursed by cheque or
demand draft. For generation of refund through paper cheque, correct address is
mandatory. In the ECS mode, refunds are credited to the taxpayer's bank account
within 24 hours of receiving intimation from the tax department, while for
paper refunds the cheque is dispatched within three days.
In
Budget 2013-14, Finance Minister P Chidambaram extended the refund banker
system to refunds of more than Rs.50,000.
