Value Add : Mandatory E-filing of Income Tax Return

Five Rupee Coin

Income Tax (Photo credit: Dinesh Cyanam)

 

A recent circular from CBDT (Central Board of Direct Taxes) mandated the filing of Income Tax return compulsorily via electronic mode if your total income exceeds 5 lakh rupees.

This circular means that all assess with total income more than 5 lakh rupees, individual & HUF, who previously had option of filing paper based return, will now have to compulsorily move to efiling.  This means that they have two options still available:

– Obtain Digital Signature & file returns online.  (Costly option)

– File return online without Digital signature, take print of ITR-V & submit by ordinary post or Speed Post only at Bangalore CPC (obvious choice for most of assess)

While this is definitely a progressive move, however, lot of individuals would not be fully aware of the process of efiling (which personally I think is quite easy) & thus they will need to take service of professionals (they charge anything from 99 to 300 rupees).  From the department, I am expecting a quick turn-around on assessment as this time there wont be requirement of special form acceptance camps during July end period & obviously no data-entry efforts.

A notification dated, May 1, 2013 No. 34/2013, issues this mandatory order. Here is the updated extract for the Income Tax Rule 12 (sub rule 3):

The return of income [***] referred to in sub-rule (1) may be furnished in any of the following manners, namely:—

(i)  furnishing the return in a paper form;

(ii)  furnishing the return electronically under digital signature;

(iii) transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V;

(iv) furnishing a bar-coded return in a paper form:

Provided that—

[(a) an individual or a Hindu undivided family, if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds five lakh rupees, shall furnish the return for the assessment year 2013-14 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);

 

– Source: Income Tax Circular

 

 

 

 

Milestone in Blog’s Journey – Views 5K

Almost two years before, January 2011, when I started writing this blog, it was with a purpose to present my view & analysis to fellow Indians & world at large, mostly on my strong segments, politics and economics.  The idea was to share & spread positiveness embedded within me towards better India, which I realized during late college days when I choose path of being in India & act as change agent rather than be on foreign soil and play blame gamer.  Over these two years I have shared my thoughts on various topics affecting common man’s life and some radical but innovative solution to the existing system or problems. Every post had its importance, but this one is special as today, this blog received all time views mark of 5000, purely based on my writing… Happy moment for sure…

5K Hits Screenshot

5000 views Screenshot

I have received numerous feedback from people across walk of life and I take this milestone of 5K views as something which will rejuvenate me to write more & write Right, as I promised myself two years ago.  I thank each and everyone who visited, commented & shared my thoughts of positive India!!!

I believed, believe & would continue to believe, India as a country would change for better from current level, if we citizens of India move towards much needed change, step after step, filled with enthusiasm and positiveness.

Jai hind !!!

 

Brainless Bomb : Election Tourism in India

Election Tourism

Gujarat Tourism

Read an interesting article about how, Election in Gujarat has been used to attract Tourist to witness, selection of representative for world’s largest democracy, India.

On a lighter note, only a Gujju (Gujarati – People of State of Gujarat) can think of such an idea of business 🙂

Indian Express Article : http://bit.ly/UOmqlG

– Image only for representation purpose, image downloaded from above mentioned Indian Express Article link

Headless Hunch : Views on India Onward – Driving Social Inclusion through Cooperative Banking

A wonderful initiative by IBM India to discuss the ideas of progress for India, India Onward. Posting my views on the topic of ‘Driving Social Inclusion through Cooperative Banking’ as initiated by Robert Parker (Link to Website)

Until recently, banking services in India were nothing short of an ordeal. An average consumer would take half a day off from work to manage simple banking transactions, like creating a demand draft or sending an outstation cheque. Today, with internet banking, ATMs and mobile banking facilities, such a situation would be considered unthinkable. The banking sector in India has grown exponentially in the past decade, but has the growth been inclusive?

According to available data only 40 percent of Indians currently have access to basic banking facilities. There is a staggering disparity across geographies, socio-economic categories and the pervasive urban-rural divide. Such exclusion is a result of a combination of factors such as physical inaccessibility, cost of access, lack of awareness and a trust deficit.

Cooperative banks, in general, are better equipped than commercial banks to address these issues, with their widespread reach, lower operating costs, flexibility, and deep-rooted connections with the local communities, which, in turn, inspire trust. With over 95000 rural and 1,600 urban cooperative banks registered in India, these organizations can play a pivotal role in the “real last mile financial inclusion”.

However, the cooperative banking sector in India, particularly in the rural areas, is plagued by poor financial health, high non-performing asset (NPAs) and inadequate infrastructure.

Technology can play a significant role in addressing this issue. With an effective application modernization approach, cooperative banks can expand their reach even further, improve operational efficiency and address customer needs more effectively.
Towards this end, the government has set up two funds: the Financial Inclusion Fund and the Financial Inclusion Technology Fund, worth INR 1,000 crores which are being extended to banks through NABARD However, government initiatives have to be supported by technology service providers, who need to perceive inclusion as an opportunity. They need to create technology and business platforms that suit the need of these banks.

One of the initiatives from the technology vendors, aimed at addressing the needs of cash-strapped cooperative banks, for an example, was the new Application Service Provider (ASP) model. ASP is a cloud computing model which allows the cooperative banks to use the hardware maintained in a shared data centre owned by a third party vendor. The banks do not need to maintain an IT support staff, helping reduce operating costs significantly.

IBM, in collaboration with its Business Partners, has been helping cooperative banks to achieve their modernization goals. However, this is just the beginning. Cooperative banks, in collaboration with the government and technology service provider, will need to aggressively pursue application modernization initiatives to enable true ‘financial inclusion’ in the society.

Well the idea of empowerment of the cooperative banking through the technology is good but I think its too theoretical. Barring bigger (stronger) cooperatives , I think this would not help smaller RRBs or cooperative banks. Let me explain my logic behind the same.

Firstly, most of these cooperatives are chaired by local political/business big shots that had led these cooperatives to poor financial conditions. Though RBI has cleaned lot of dirt by way of regulations, these people don’t have strong desire to induce accountability and transparency in cooperative banking procedures.

Secondly, ASP model might be best available solution for technology of these cooperative, however, I see serious lack of supporting Infrastructure in many parts of country. For e.g., in Rural India, rolling of 3G services would still take lot of time and thus the idea of social inclusion via ASP model would be at very slow pace.

Third, existing alternate solutions like, gprs based business correspondent device and platform, aadhaar based authentication mechanisms enabling PSU & private banks to expand its reach will probably get more push, both financially from government as well as socially from individuals, due to sheer lost of trust in cooperatives due to scams.

Lastly, enabling cooperative banks & RRBs with advance technologies would make them vulnerable to the risk of merger & acquisition(read takeovers) by the bigger banks, more by the new private banks which would get license to operate soon. This would be last thing the current administrator of cooperative will want to happen.

On personal front I believe financial inclusion will lead to social inclusion, but I hardly see it coming from cooperatives or RRBs. I see it coming from independent entrepreneurs, working as extended arm of bigger banks or from the mergers of small cooperatives & RRBs into new private banks.

A World’s View Without Glasses – A Open & Shut Case of SATYAM

First, take control of the two companies so that no one else starts looking under the carpet for blood stains. Second, make sure that the body is burnt so that there is no autopsy. And third, make sure that the investigations went nowhere.

This is how with a superb political connection, even a obvious truth can be blinded in court of law.  This immensely informative article is by R Jagannathan @ Firstpost.  Once upon time, entire world talked about how Satyam dive into ‘fame’ due to the corrupt accounting practice of managment but no one now even remembers how easily the man or ‘mastermind’ behind the entire downfall of Satyam got a bail… Do read this article Continue reading

Banking Correspondent – A way to India’s Financial Inclusion Dream

During my recent visit to a small 4-5K population village, I got an wonderful opportunity to have my first physical interaction to the concept called ‘Banking Correspondent’ and now I have no doubt this would be single biggest  step in Financial Inclusion success story of India. Continue reading

Economics & Entertainment – A Cricket Perspective

Few minutes from now, there begins the biggest and most prestigious tournament in the world of cricket and just like billion of other Indians, I too am looking forward to same with a wish that India wins it…  But it’s too early (unlike news channels) to say who will perform best on that day 🙂

 

I was recently reading a survey by ASSOCHAM (The Associated Chambers of Commerce and Industry of India) that this cricketing extravagance would result to loss of 768 million man hours.  Continue reading