From next year, IT returns may be filed anywhere

Companies and individual salaried taxpayers may be allowed to file their returns anywhere in the country from next year. The finance ministry considering a proposal to allow "jurisdiction-free filing and processing of returns of income".

The revenue department has set up an internal committee, headed by member (investigation & computerisation) J G Pendse, to examine the feasibility of the move. The committee has also been asked to consider if any legislative amendments would be required for the purpose.

"With online filing of returns being permitted, jurisdiction will no longer be relevant. However, jurisdiction is important in case of paper filing. If the requirement is waived, some circles, like those in Delhi, could find a huge increase in the number of returns while some other circles could find their returns coming down in a big way," an official said.

At present, individuals file returns in an area where they are based while companies file it at the place of registration or principle place of business. Within a city, a "ward" or "circle" for filing returns is allocated to a company and its salaried employees on the basis of the first letter of the company's name.

"Also, the PAN, quoting of which has been made mandatory, would be sufficient to indicate details about the company or individual," an official said, adding that manual processing of returns is also no longer necessary unless there is a demand or refund of tax.

Officials pointed out that the income-tax department had made changes regarding the jurisdiction of filing of returns in 2000. It allowed returns for circles coming under one range to be filed anywhere within the range.

Each commissioner of income-tax has, on an average, three ranges, with each range in turn having around four circles.

The department had in September last year launched the Electronic Furnishing of Return of Income Scheme, 2004.

Under it, eligible assessees can file their returns of income electronically through persons authorised to act as e-return intermediaries. The intermediaries digitise the data of such returns and transmit it electronically to the e-filing server of the department under their digital signatures.

Tax experts contend that no significant changes would be required in the law for the move being considered as rules pertaining to filing of returns come within the purview of delegated legislation of the Central Board of Direct Taxes. The CBDT has powers to make the necessary changes in the rules.