Taxpayers who are unable to file returns in the ward in which they are assessed to pay tax will be able to file their returns anywhere in the country from 2009-10, following enhanced computerisation in the income tax department.
A taxpayer's ward is determined on the basis of his or her place of work, business or residence. Every income tax officer has a specific jurisdiction (ward) that is a geographically contiguous area. Returns have to be filed in the specific ward. If a taxpayer's location changes, the department has to be notified of the address change.
This practice is complicated because of the crucial Permanent Account Number (PAN) card without which a return cannot be filed. The tax department has to be separately notified to change the PAN address (even though the number remains the same).
Over 31 million tax returns were filed in 2007-08 and given this volume, tax department officials said it was not possible to scrutinise every single filing to check taxpayer compliance, hence the move to ease locational restrictions.
This will be made possible by the setting up of central tax return processing centres in Delhi, Mumbai, Kolkata, Chennai and Bangalore.
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"Filing returns would be jurisdiction-free in the long-run," said Ajai Singh, member, Central Board of Direct Taxes, who is in charge of the department's computerisation drive.
"Once the comprehensive restructuring of the tax administration is complete, taxpayers can file returns from anywhere, check accounts online and may get refunds even in a week after their return is processed. The interface with taxpayers will be minimised to issues like scrutiny and disputes," Singh added.
Tax return filing is partly "jurisdiction-free" for returns filed online (e-returns). Around 2 million e-returns were filed in 2007-08. The number is expected to go up to 5 million in 2008-09, said Singh.
To make anywhere filing of returns possible, the department is setting up a pilot central processing centre at Bangalore to process returns collected from any region. This facility will be linked to a national database.