There is an incentive for taxpayers who file their incometax returns electronically they will get their refunds within a month.To speed up refunds and encourage electronic filing of tax returns,the Central Board of Direct Taxes has promised expeditious refunds.The wait for refunds in the case of physical tax returns ranges between 5-10 months.
We want tax-payers to file electronically as that helps in faster processing of refunds, Sudhir Chandra,chairman,Central Board of Direct Taxes,told reporters.As on December 31,2010,there were about 40 lakh refund cases pending with the tax department.Last year,a Comptroller and Auditor General report had highlighted that it takes as much as 10 months for a taxpayer to get his refund.Reports of widespread c o r r u p t i o n and frauds in issue of refunds have also spurred a revamp of the refund system.The whole idea is that small taxpayers should not face any hardship in his interface with the department, Chandra added.Though the e-filing of tax returns is rising in absolute terms every year,its level has stagnated at about a quater of the total retuns filed.The verification of the paper tax returns filed is a tedious process that also delays tax refunds.This has become a bigger issue with the rising refunds.In 2010-11,the government had refund extra tax of Rs 78,000 crore.E-filing ensures that tax payers information on income,taxes and refunds are uploaded in the tax system instantly and tax computations are processed on a real-time basis, said Vikas Vasal,executive director,KPMG.
Taxpayers filed online returns in 2010-11,the figure was just 1.6 lakh four years ago 6-18 months
I-T departments estimated waiting period for refunds.According to CAG,it takes 10 months for tax-payers to get back their money .
If you file your income tax online using digital signature you neednot have to send the hard copy of the ITRV which may delay the process of refund and confirmation of receipt and you may get mail stating we have not received your ITRV failing to receive will invalidate the e-filed return. So the best option would be to e-file your tax return using Digital signature.