Finance Minister P. Chidambaram on Wednesday flagged off a pilot project in Delhi and Patna to disburse income tax refunds. The State Bank of India will be the banker to credit the refund amounts to the accounts of taxpayers. The SBI will do this within three days of an assessment order being sent to it.
How It Works
*The SBI will make the tax refund within three days of receiving an assessment order
*It will segregate payments for electronic clearing or through banker's cheques. Refunds will be sent by registered post with acknowledgement due
The SBI will segregate payments for electronic clearing or through banker's cheques. Refunds will be sent by registered post with acknowledgment due. Details of undelivered cheques will be returned for fresh issue. The project will help taxpayers get refunds quickly while drastically reducing scope for corruption and fraud.
Emphasising the need for speedy refund of I-T claims, Chidambaram said the "system has been affected by bogus cheques. There are instances where second cheques have been issued. Tax challans have been forged".
He said refund as a proportion of tax collection has been declining. Refunds are down to 18.18 per cent of income tax collection in 2004-05. They formed 26.52 per cent in 2002-03.
Plans are afoot to extend the pilot scheme to 60 cities to cover 80 per cent tax assessees.
Security measures to prevent fraud include data transmission under `digital signatures'. Drafts above Rs 2 lakh will have facsimile signatures of two persons and transparent stickers.
The scheme will operate from the premises of SBI under its supervision. The refund amount is reimbursable to the SBI as is the current procedure for government accounts. There will be an indemnity to the I-T department for loss due to negligence.
From:- HT, 25/01/07
