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Representation
April 9, 2008
To,
Mr. P. Chidambaram
The Hon’ble Finance Minister, Government of India,
North Block, Vijay Chowk, New Delhi-110001.
Ref : BCAS Representations on E-payment of Taxes
The CBDT has vide Notification no. 34/2008, dated 13th March, 2008 introduced new Rule 125 making it mandatory for all corporates and other assessees obliged to get their accounts tax audited u/s. 44AB of the Income-tax Act, 1961 to pay taxes electronically with effect from 1st April, 2008.
The effort of the Tax Department in moving towards paperless system of tax payment and compliance by assessees as well as delivery of services to assessees by the Tax Department by harnessing Information Technology is well appreciated. BCAS has always been supportive of such measures. However, we would like to bring to your notice certain transitional difficulties encountered in e-payment of taxes by the assessees for which a clarificatory Circular from the Department would go a long way in allaying apprehensions of taxpayers.
Firstly, though the new Rule permits electronic payment of taxes, either by availing net banking facility or by use of debit/credit card, the mechanism of payment by debit/credit card is not yet operational. Neither the Income-tax Department’s website, nor NSDL’s website presently offers the facility of making tax payment by using debit/credit card. For assessees like small companies not liable to tax audit or professionals or individuals/partnership firms having medium range turnover (say, Rs.40 lakhs to Rs.1 crore), use of debit/credit card is a cheaper and efficient option, since the directors and/or partners of such assessees would be already holding debit/credit cards.
Secondly, a taxpayer has to necessarily open an account with one of the 26 banks which have been authorised to accept e-payment of taxes, if they are presently banking with other banks. This increases administrative cost for the taxpayers.
Thirdly, the payment gateways of several banks offering net
banking facility for tax payment have not yet fully stabilised. There are
several technical difficulties faced by the assessees while using the net
banking facility whereby online requests for tax payments are not getting
processed. For example, user id and password allotted by the bank is not
accepted, since the bank’s database is not updated, requests for higher limits
for payments by authorised users are not processed immediately by banks, time
lag in communicating user ids and password by the banks for security purpose,
etc, etc. Since it is critical for taxpayers to pay their taxes on time,
particularly taxes deducted at source, to avoid adverse consequences like
interest, penalty and disallowance of expenses u/s.40(a)(ia), many assessees
have preferred to pay taxes under the conventional method through cash/cheque
payment though technically they were under obligation to make payment by e-mode
as per Rule 125. It is learnt that banks are also accepting such payments.
It is, therefore, prayed that having regard to difficulties
faced in transitional period, it may be clarified that there will be no adverse
consequences for taxpayers who have paid taxes by cash/cheque though obliged as
per Rule 125 to make payment by e-mode for a period of at least six months from
1st April, 2008. Further, it is also requested that the facility of e-payment
may be extended to other banks also or alternatively other banks may be allowed
to open payment gateways for their customers to enable them to deposit tax with
one of the 26 authorised banks.
Thanking you,
We remain,
Yours truly,
Rajesh Kothari Pinakin Desai Rajesh S. Shah
President Chairman Co-chairman
Taxation Committee
