Seeking to tone up tax administration, the government on Friday proposed to appoint bankers for income tax refunds, which currently takes a long time.

"The government is looking at appointing refund bankers in next one year's time, who will credit refund in the bank accounts of income tax assessees," revenue officials said.

Currently, refunds are handled by State Bank of India [Get Quote], the officials said, adding that once refund bankers are appointed, tax refunds would be "institutionalised".

But refund bankers would be meant for only those who file income tax electronically and the new form 2F launched this year is aimed at facilitating electronic filing of income tax returns.

The new form, which was notified early this month, has for the first time introduced the controversial 'cash-flow statement' in which details of expenditure, income and investment would have to be given by income tax assessees.

Filing of cash flow statement is, however, optional, the officials said, adding that the tax assessees also had an option of filing returns in the old 'Naya Saral' form 2E as well up to July 31, the last date of filing tax returns. Beyond July 31, tax assessees could file returns in the new form 2F and old Saral form 2D.

The new tax form 2F, which has received flak from several quarters including the Congress party, was notified for this year. The form would be re-notified for next year (2007-08)

and could contain modifications based on the review and feedback.

Every year, the Income tax forms are re-notified, the officials said.

The tax authorities were also working on simplification of form 16 AA meant for assesees having only salary income up to Rs 1.5 lakh annually.

The form 16 AA might be made applicable for only persons whose income from salary is beyond Rs 1.5 lakh a year.

The applicability of this form could also be broadened to include additional income like interest from savings deposits and banks and post offices so that a larger percentage of tax assessees could be spared from filing the presently 4-page new Form 2F, the officials said.

Officials clarified that filing of cash-flow statement in the new form 2F might be optional, but those who do not file it could get notices from tax authorities based on the information gathered from Annual Information Return (AIR) aimed at plugging tax evasion.

The basic purpose of cash flow statement is to track if the assessees were concealing income, they said, adding unlike in the past, tax authorities have lot of access to information like annual information return (AIR) to track the lifestyle of tax assessees.

The tax authorities have also collated individual ledger of tax payers, the officials said, adding whenever income tax returns are filed, the tax authorities can access on their computer all details about the tax assessees like PAN and other details, including some of the high-value purchases and investments.

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