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E-filing: a face-off between CAs and portals?

By Benny Thomas | Monday, 27 July 2009, 21:10 Hrs | 4 Comments

E-filing: a face-off between CAs and portals?

Bangalore: Only a few taxpayers showed interest in online filing of tax returns last year, the trend continued even during the initial days of the current filing season, but the momentum has picked up as the deadline of July 31 draws closer. As per the Income Tax Department's data, out of the three crore tax returns, only four percent or 11 lakh returns were filed online last fiscal. Experts feel the number could go up drastically this year and this may also result in a competition between the Chartered Accountants (CA) and the web portals.

The increase in e-filing may affect the business of CAs, because many taxpayers depend on them to prepare and file their tax returns. "Though, there may be some impact to our business, it is good to see many people filing their returns online as it reduces the paperwork and gives us more time to handle auditing, which is our core business," says Samuel James, a Bangalore-based CA. According to another CA, Ravishankar, last year because the process was complicated people used to prefer filing their returns manually, but now since the whole process is simplified the trend of e-filing is catching up fast.

Cashing in on this opportunity, several portals have been launched that cater to the taxpayer, who opts for e-filing. Most of the firms were set up in the last one year and are optimistic about doing brisk business during this year. These firms charge their clients anywhere between

100 to

800 depending on the requirements. Some of them even offer free service to attract the low income taxpayers.

Bangalore-based elagaan.com, which is promoted by Navin Kumar, was recently launched to provide advice to the taxpayer. "This year there are more people who are filing the returns online, because now the process has become simpler," says Kumar. elagaan.com provides tools that can be used by individuals to prepare their tax returns for filing online.

Taxyogi.com is another portal that was started to offer guidance on filing returns. Mamtha Banerjee, Founder of Taxyogi says, "We started the portal to mainly cater to the techies, but now we are getting more responses from all kinds of professionals." Even Mamtha points out that the convenience factor is the one that has helped in the growth of this trend.

The concept of e-filing in India was introduced in 2002 and it was made compulsory for certain business segments from 2005. From 2006 onwards, individuals too were allowed to file their returns electronically. In order to speed up the process of e-filing, the government has also set up a Centralized Process Center (CPC) in Bangalore for processing all electronically filed returns in the country.

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Reader's comments(4)

1: The e-filing seems to have one requirement that is holding me back from e-filing. The requirement is that the acknowledgement or ITR-V should be signed and sent to Bangalore office by "Ordinary Post" only. In case the post fails to remain delivered, it would require me to re-file and this particular time, I would be beyond the last date. It would have been very helpful if they could accept the ITR-V in local ITOs.

Posted by:Vinayak Bhat - 28 Jul, 2009

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Yeah, it is a long way before India get to the level of other countries like USA. But I think the country is doing the best it could so you should give them some credit.
As per the submission of the ITR-V etc sites like elagaan (which i used this year) provide services to ofload the task, which makes a hassle free way of doing it.

Anita Singhi Replied to: Vinayak Bhat - 02 Aug, 2009

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3: What the hell is e-filing ? The site of income tax india has no options in the respective ITRs say no provision for SLM method of depreciation. No improvement has so for been incorporated in ITR4 for different type of businesses and only standardised heads are there. CAs be involved in framing a good programming who are experts in accounting rather than depending on IT professionals who do not even know debit/credit concept and its repercussions.

Posted by:Ashok - 28 Jul, 2009

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4: Though there are some loopholes that still needs to be fixed, e-filing looks like a step in the right direction. Hope the government takes note of the current drawbacks and improves the process next year. Though, CAs may lose some business, they can balance it with the other areas that they handle like auditing.

Posted by:Ram - 27 Jul, 2009

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