Mumbai:
Incme Tax refunds will now be credited electronically
through RBI's electronic clearing system (ECS).
The
RBI in a circular issued to chiefs of banks said, "The
Government has since taken a decision to implement ECS
credit for direct tax refunds. The Government will issue
a notification in this regard shortly.
Banks
should waive ECS charges in respect of Income Tax Refund
Orders (ITROs) as and when the ECS mode is adopted by
Government for refund of taxes.''
Currently,
paper-based ITROs are being issued by Income Tax Department
for refund of income-tax to assesses. The banks are then
required to handle ITROs and credit the refunds to their
constituents' accounts. Currently income-tax refunds are
handled nationalised banks led by State Bank of India.
"The above procedure involves, elaborate manual handling
of these instruments at banks' branches.
Such
manual handling of ITROs are prone to various operational
risks such as loss, frauds, tampering etc,'' said the release.
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