The Hindu Business Line : Online tax accounting system from June 1

ALMOST a year ago, the Income-Tax Department launched a pilot project in four metros. It was to test online transmission of tax payment data from selected branches of designated banks to the RBI and further to the I-T Department. The stated objective of the project was to study the levels of accuracy and speed in data transfer of tax payment, so that any discrepancy between the amount of tax collected and as conveyed electronically could be detected soon.

Unobtrusively, even as the country is preoccupied with elections, the department has announced June 1, 2004 as the date for the launch of its new Online Tax Accounting System, or OLTAS. "At present there are seven different types of challans for depositing direct taxes into the government account. These will be replaced by three types of challans," observes the press note. Thus, there is one for payment of income tax, corporation tax and wealth tax; another for depositing tax deducted at source from corporates or non-corporates; and yet another for payment of gift-tax, estate duty, expenditure tax and other direct taxes.

How does it work? "The collecting bank branch will put a rubber stamp on the challan and its counterfoil indicating a unique Challan Identification Number (CIN) comprising seven-digit Basic Statistical Return (BSR) Code allotted by RBI to that bank branch," explains the department. While CIN will be unique, countrywide, and be used for identifying the challan in the OLTAS, there would also be a challan serial number running to five digits. A counterfoil would be at the bottom of the form and it would be for the taxpayer, after the bank receipts duly.

Then comes the caution from the department: "Because there will be only one copy of challan it becomes extremely important that the challan is correctly filled and PAN of the taxpayer and PAN/ TAN (Permanent Account Number/Tax-deduction Account Number) of the deductor as the case may be, is correctly indicated in the challan, and that the right columns are ticked/ filled in the challan, and that the taxpayer collects a proper stamped acknowledgement from the banks indicating the CIN."

The job of the collecting bank will be to capture the challan data and transmit the same electronically to the Department. "With the help of CIN and PAN every payment will be uniquely identified resulting in correct credit for payments by taxpayers and online transmission of details of tax payments to the Income-Tax department will result in faster credit."

After the system takes off, taxpayers will have only to indicate CIN in their tax returns, rather than having to enclose proof of payment of pre-paid taxes.

"This system will not only simplify the procedure for payment at the collecting branches of designated banks it will be a breakthrough in accounting of direct tax payments," notes the communiqué. To facilitate the operation of the new system all collecting branches of various banks have been networked and integrated with Tax Information Network (TIN) and the Department.

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