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Wednesday, Jul 03, 2002

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Cos sceptical over success of bulk filing of returns scheme

Mohan Padmanabhan

According to a tax practitioner, bulk filing by an employer would actually go beyond the salary angle, unlike TDS at the employees' end, and any unforced errors may boomerang on the corporate.


THE newly-introduced Scheme for Bulk Filing of Returns by Salaried Employees, 2002, made effective from Monday may turn out to be a non-starter, if one were to go by the immediate reaction of some of the large corporates such as ITC and Tata Tea.

The tax consultants too are not quite enthused about the scheme, describing it as an impractical one in certain respects. The I-T Department, however, thinks it will enable faster processing of returns and speedy issue of refunds.

The general feeling is that since it is an optional scheme, there may actually be very few takers, given the level of preparedness on the part of the Income-Tax Department as far as total computerisation was concerned.

Says Mr Narayan Jain, tax practitioner: "This may well be a thankless job for the corporates, and somewhat akin to passing the buck by the department. And if one were to take into account the additional workload that companies have to undertake and the costs to be incurred to create trained manpower, it is highly unlikely that anyone will willingly take on the burden.''

The Tax Department top brass in Kolkata, when contacted by Business Line, admitted that the department will have to liase effectively with corporates on the utility of the scheme, under which the returns will be processed on priority, ensuring that end results such as refund and intimation slip prove beneficial to employees. They expressed confidence that it would pick up, after may be some initial hiccups, as it provided a `fast-track' channel for hassle-free filing of returns.

As per the scheme, commonly known as `Suvidha', any eligible employer will have to seek the consent of eligible employees willing to furnish their returns of income along with mandate forms, where refund is to be transferred to the bank account of the employees. It has become effective from July 1 for employees assessed at Ahmedabad, Bangalore, Baroda, Bhopal, Chandigarh, Chennai, Delhi, Jaipur, Jabalpur, Gandhinagar, Hyderabad, Kolkata, Mumbai, Nagpur, Pune and Thane.

Mr Jain suggested that if the department was serious about the scheme, it should organise an orientation programme at the employers' end for imparting familiarity about the prescribed formats and also arrange to collect the forms at the employer's premises. The department has to be fully prepared on the manpower front for such a scheme to succeed fully, he pointed out.

According to Mr D. Rahman, Chief Commissioner of Income-Tax, Kolkata-V, the scheme, though optional, provided an additional mode of furnishing returns by persons deriving income from salaries. Under the scheme, an `eligible employee' may furnish his return of income for an assessment year which he is required to furnish under sub-section (1) of Section 139 during any financial year to his employer, who will transcribe the data of such returns on computer readable media, using an authorised Bulk Return Preparation Software (BRPS) M, which will be made available by the Income-Tax Department. He dispelled any fears the corporates may have on teething problems at the initial stages, and said the department would not take a very serious view of genuine errors at the initial stages. Such bulk filing, he felt, might eventually pave the way for filing of returns through the Internet.

The employer is expected to furnish these returns together with the data on specified computer readable media, called "Bulk Return'', to the designated Assessing Officer by the due date. The BRPS can be collected from the department, and the specified computer readable medium for furnishing of bulk return will be, a) CD ROM of 650 MB capacity, b) 4mm 2GB/4GB (90m/120m) DAT Cartridge or, c) 3.5'' 1.44 MB floppy disk.

It devolves on the employer to ensure correctness of the transcribed data on the `Bulk Return(s)' vis-a-vis the returns of income submitted by the employees. And this is where, says Mr Pallav Gupta, GM, Taxation, of ITC Ltd, problems may arise.

He felt the corporates may not be in a position to take full responsibility of such bulk filing of returns in the format prescribed by the department, as any mistakes, inadvertent or otherwise, may render them liable for penal action. He said the scheme, before becoming operational, should be properly sold to the corporates on all aspects, especially the software part.

According to Mr Jain, such bulk filing by an employer would actually go beyond the salary angle, unlike TDS at the employees' end, and any unforced errors may boomerang on the corporate. He said bulk filing of salaried returns also entails bulk refund, and distribution may not be such an easy task in a large corporate house like ITC or Tata Tea.

According to Mr I.N.Basu, Deputy GM, Finance, of Tata Tea, the department will first have to win the assessee's confidence on small matters like acceptance of returns without hassles before they can think of such grandiose schemes like bulk filing of returns.

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