"If you know how to file your income-tax returns, e-filing should not be a problem," is the reaction of an income-tax professional when told about the government's proposal to induct another 1.8 million people who have incomes of Rs 5-10 lakh in the e-filing process.
Tax experts concur. The problems, as such, don't sound daunting but they could confuse you.
For instance, the income tax website is supposed to recognise you through the name given in your Permanent Account Number (PAN card). But the name in the bank account or other official statements might be marginally different. For example, many people give their father's name as 'middle' name in the PAN card, but do not use the same when it comes of bank accounts or employment records.
Then, e-filing by itself is not enough. Many don't know that they need to post the Income Tax Returns - Verification form to complete the process. The result: A scrutiny letter.
Of course, even though one might send the letter, there is no acknowledgement from the department. So, you have to send the letter, either through ordinary post or speed post to Bangalore. "Even if you personally go and deliver it, you have to drop it in a box and there is no acknowledgement," says a tax expert.
The biggest challenge will be the taxpayer's ability to use computers and the internet. In smaller towns and cities, everyone would not have a computer/laptop at home.
In such cases, how many would be ready to sit in internet cafes and pay on an hourly basis to file returns? You cannot be sure because if the internet speed and connectivity aren't good, you could be sitting for hours and still not get done. The waste of internet expenses is a separate matter.
Nagaraju PS, director of etaxmentor.com, a Hyderabad-based e-return intermediary (ERI), is optimistic that things will settle in a couple of years. He feels people will face problems in the first year but will soon settle down with the system. "What would help is setting up of facilitation centres to help people," he says.
Taking professional help is one solution. But, that could be expensive. For yearly service, chartered accountants can ask for anywhere between Rs 2,500 to Rs 5,000 and for only filing returns, they charge Rs 350-500 per person. Or go through the ERIs, many of which provide free service to those below the Rs 5-lakh bracket and might extend free service to high income groups if they see a good response after this mandate, says Sakaar Yadav of myITreturns.com.
The good part about online returns is that it helps get refunds faster, in two-three months as against one year or more till now. That should be a good incentive to get started.