Tax refunds to go to taxpayers' accounts

The Central Board of Direct Taxes will send tax refunds directly to the taxpayers' bank from June 2006, M S Darda, chairman of the the board, said today.

"It will be fully automatic. Tax refunds will be sent directly to taxpayers' bank accounts from June 2006," Darda said on the sidelines of an Assocham conference on taxation here. This would be done through electronic clearing system (ECS), he added.

The move assumes importance as many individuals face difficulty in getting tax refunds and have to wait for months.

The new refund system is part of the CBDT's drive to reduce the interface between taxpayers and tax officials through streamlining of procedures.

Darda said the tax department faced difficulty in sending the refunds as many persons did not furnish their bank account number while filing their income tax returns.

"Unless the person validates whether refunds should be sent in the bank account and furnish the bank account number, we cannot sent the refunds in their bank accounts," he said.

On the other new tax -- banking cash transaction tax (BCTT), Darda said it was difficult to administer as some people have more than 100 bank accounts and 1,000 demat accounts.

Many people have accounts in cooperative banks, which were not collecting BCTT promptly.

"Now we know that these things are happening," Darda said and indicated that tax authorities would further streamline tax provisions.

Even in case of annual information return, he said there were a number of transactions where personal account number (PAN) was not quoted. "Letters have been written to those persons," he added.

He said some of the state registrars were filing information in regional languages, which was not compatible with the air system. The problem has been solved now and information was being furnished to the tax authorities, he added.

On vacancies in CBDT, he said, "There are 35 vacancies. The posts will be filled up by December-end of early January as soon as they are approved by the appointment committee of the Cabinet."