Income tax returns filing has always remained as something complicated in taxpayers’ minds; making them reluctant towards filing returns. The Central Board of Direct Taxes (CBDT) has been trying to simplify this process and is taking small steps towards this goal.
Recently, CBDT changed the format of Form 16 to make it in line with the ITR-1 Form to make it easier for salaried employees to file returns.
As a next step towards the goal, CBDT is planning to pre-fill the details of dividend from mutual funds, gain/loss on equities, and interest income in the income tax returns forms.
CBDT is in talks with the market regulator, SEBI, to explore ideas on getting details on taxpayers’ investments. It is said that two rounds of discussions have already been done.
The pre-filled forms will be designed such that they can extract salary breakup from a taxpayer’s Form 16. Currently, the pre-filled forms are capable of downloading personal details, taxes paid, and bank account details in the ITR forms on the basis of a taxpayer’s permanent account number (PAN).
In addition to salary breakup and personal details, CBDT is also figuring out a way to enhance the income tax utility such that it can import interest income information from all savings accounts held by a taxpayer. This information can be imported based on PAN or Aadhaar that must be mandatorily linked with the bank account.
Such a pre-filled form can make it much easier for taxpayers to file income tax returns online. Taxpayers need not refer multiple documents to enter income information on ITR forms anymore.