CA Forums

(To benefit crores of stakeholders including taxpayers, Banks/Non-banking Finance Corporations (NBFCs) and the IT Deptt. by avoiding unnecessary paperwork and aligning with the Digital India initiative.)

𝟭. 𝗣𝗥𝗢𝗕𝗟𝗘𝗠 𝗦𝗧𝗔𝗧𝗘𝗠𝗘𝗡𝗧

The current system forces taxpayers to rush to each bank/NBFC every April with physical Form 121 (formerly 15G/H) or send these forms by post or through brokers for which they receive no acknowledgement and to bear the risk of forms lost in transit, banks/NBFCs to drown in paperwork with heavy storage burden, and IT Deptt. to collate millions of forms. Even then, the IT Deptt. gets no real-time view if a taxpayer’s total income declared through all his forms crosses the tax-free limit since Form 121 is submitted to different banks/NBFCs having no coordination between them and, therefore, data cannot be aggregated at the PAN level. This is something in which the IT Deptt. is greatly interested but which is practically impossible to achieve through the present paper-based method.

𝟮. 𝗣𝗥𝗢𝗣𝗢𝗦𝗘𝗗 𝗦𝗢𝗟𝗨𝗧𝗜𝗢𝗡: 𝗖𝗘𝗡𝗧𝗥𝗔𝗟𝗜𝗭𝗘𝗗 𝗗𝗘𝗖𝗟𝗔𝗥𝗔𝗧𝗜𝗢𝗡 𝗢𝗡 𝗧𝗛𝗘 𝗘-𝗙𝗜𝗟𝗜𝗡𝗚 𝗣𝗢𝗥𝗧𝗔𝗟 𝗢𝗙 𝗧𝗛𝗘 𝗜𝗧 𝗗𝗘𝗣𝗧𝗧.

I propose shifting Non-Taxable Income Declaration to the E-Filing portal of the IT Deptt. It will involve following 3 steps:

𝗦𝘁𝗲𝗽 𝟭. 𝗙𝗼𝗿 𝗧𝗮𝘅𝗽𝗮𝘆𝗲𝗿𝘀: Log into the E-Filing portal, click the ‘Non-Taxable Income Declaration’ link (to be created new as per the proposal), select the Financial Year, enter Estimated Income, and enter TAN of banks/NBFCs whom they want to request not to impose TDS while paying interest to them.

𝗦𝘁𝗲𝗽 𝟮. 𝗙𝗼𝗿 𝗕𝗮𝗻𝗸𝘀/𝗡𝗕𝗙𝗖𝘀: Tag PANs in their database for ‘No TDS’ for all PANs present in IT Deptt.'s database. Update payable income in IT Deptt.'s database with their database (both the jobs automatically done by computer).

𝗦𝘁𝗲𝗽 𝟯. 𝗙𝗼𝗿 𝘁𝗵𝗲 𝗜𝗧 𝗗𝗲𝗽𝘁𝘁.: Tag a taxpayer if total income payable to him by all banks/NBFCs crosses the tax-free limit (automatically done by computer).

𝟯. 𝗞𝗘𝗬 𝗕𝗘𝗡𝗘𝗙𝗜𝗧𝗦

𝗮) 𝗙𝗼𝗿 𝗧𝗮𝘅𝗽𝗮𝘆𝗲𝗿𝘀: No branch visits, sending forms by post or through brokers not required, no need of taking acknowledgement, no risk of forms lost in transit

𝗯) 𝗙𝗼𝗿 𝗕𝗮𝗻𝗸𝘀/𝗡𝗕𝗙𝗖𝘀: No paper work, forwarding hard/soft copies of Form 121 to IT Deptt. not required, saving of thousands of man-hours, no paper storage

𝗰) 𝗙𝗼𝗿 𝘁𝗵𝗲 𝗜𝗧 𝗗𝗲𝗽𝘁𝘁.: Automated e-verification if income declared through forms exceeds tax-free limit, no papers to collate

𝗱) 𝗚𝗲𝗻𝗲𝗿𝗮𝗹 𝗕𝗲𝗻𝗲𝗳𝗶𝘁𝘀: Significant reduction in compliance costs, substantial paper savings, avoidance of postal charges and travel, environment protection

The detailed proposal can be accessed here:

REPLACING FORM 121 WITH ONLINE DECLARATION ON E-FILING PORTAL: A PROPOSAL FOR CBDT