The perils mentioned here may seem few in number, but each of it encompasses an entire set of dangers posed by the free online tax filing offers.
July 31 is fast approaching and there is a rush to file income tax returns. With the advent of online filing of income tax returns, many websites and organisations have mushroomed with the intent of helping people file their tax returns online for free.
In the case of delivering the service of filing income tax returns online in lieu of a fee, the website is usually held accountable and is backed by an organisation which has a bunch of professionals to undertake this important responsibility.
However, many an income tax payer is lured into the trap set by free online income tax returns filing offers. Here are a few of the perils involved:
Accountability
When the organisation is rendering a service for free, the seriousness and accountability involved in delivering the service comes down by a few notches in most cases.
Given that income tax returns are of immense consequence, any gap or lethargy will have grave repercussions. Free online tax filing offers come with the peril of a lack of accountability.
Information security
Invariably, free online tax filing offers lead to websites whose motto is to generate a database. There may be no confidentiality or security clause which assures that the user’s information will not be divulged or shared to any other third party apart from the Government or the Income Tax Department.
This lack of security of personal information poses grim dangers to users who use such offers to file their taxes. There is always a lingering threat of loss of private data.
Given that a user will be divulging extremely confidential information such as PAN number, bank account numbers, and investment details, it can easily lead to a loss of identity theft.
Unequipped to handle vagaries
Usually free online tax filing offers may not handle anything more than simple tax filing data. For example, if a tax payer has had a job change in the year, then his or her taxable income will change and has to be duly accounted for.
Similarly, care has to be taken when accounting is done for the interest accrued on the savings bank account.
In some cases, these companies charge a fee to handle complex IT filing situations. When a website cannot handle such vagaries which differ on individual tax payer basis, the users will face the onerous tax of redoing their entire paper work, or may end up getting notices from the IT department.
Credibility
Most of the free online tax filing offers comes from spurious sources which lack credibility. There is no way in which one can check either the authenticity of the website or the promoters. This in turn results in ambiguity in terms of if the tax returns have actually been filed correctly or not.
The perils mentioned here may seem few in number, but each of it encompasses an entire set of dangers posed by the free online tax filing offers. It is better to be safe than sorry, when it comes to hard earned money! One must validate the facts and ensure s/he is submitting tax returns through legitimate online tax filing service providers.
Photographs: Presidio of Monterey/Creative Commons
Anil Rego is the founder and CEO of Right Horizons, an investment advisory and wealth management firm that focuses on providing financial solutions that are specific to customer needs.
