7 Reasons why you should file Income Tax Returns electronically

An article we wrote appeared in TRAK.IN, a major Indian blog which covers the Business beat. Link to the original article: http://trak.in/tags/business/2012/05/25/top-7-reasons-income-tax-returns-electronically/

We are pasting an excerpt below. The original article is more fun to read with a bit of critique of e-filing methodology.

Here are the Top 7 reasons why you should file your tax return electronically this year:

1. Compulsory for some people:

There are cases where it is mandatory to file tax returns electronically. If you earn more than 10 Lakh Rupees a year, you have to e-File. If your books are audited, then you have to e-File. Businesses typically have to e-File.

2. Faster Refund processing:

The Income Tax Department has a mandate of issuing refunds faster for e-filed returns. The internal deadline is 59 days for issuing refunds of returns received electronically. This is useful if you have a refund coming.

3. Convenience:

Why go to the Income Tax office to submit a tax return when you can submit the tax return at the click of a button? Petrol is very expensive, so anything that helps you avoid a trip is great!

4. Color printing needed for ITR-1 and ITR-4S:

The new ITR-1 and ITR-4S forms need to be printed in colored format. Access to good quality color printout may not be always available. It is easy to just submit electronically instead of worrying about the quality of the print-out. The colored format is specified by the I-T department so they can scan your tax return. So in the end your tax return is going to be processed electronically. Might as well help the department!

5. Accuracy of data:

The I-T department will scan your tax return or someone will manually feed in the data to their electronic systems. There might be mistakes in this manual process. It is better to submit data electronically. You know they’ll get the same data you actually submitted!

6. Better for the environment:

The tax return you print is on paper that is obtained from cutting down trees. Be good to the environment. E-file and save the environment!

7. Electronic backup of your tax records:

If you use e-filing with service providers like cleartax, you get backup of your tax records which you can download when you need them later. A lot of times, we need I-T returns for visa applications, bank loan applications, etc. We forget to keep photocopies of the original tax return or sometimes just misplace the papers. With electronic backup of tax records, we can go to the service provider website and download them again.

[About the Author: Archit Gupta, is the founder of ClearTax. ClearTax helps Individuals prepare and electronically file their Income Tax Returns.]

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