Launching e-filing of income tax returns, with industry giants TCS [Get Quote] and Hero Honda Motors [Get Quote] being the first two corporates to avail the facility, Chidambaram said more "friendly initiatives are underway and will be announced in due course."

Attributing the massive 40.9 per cent increase in direct tax collection during the first half of current fiscal to the constant endeavour of tax authorities to improve relations with assesses, he said while the system was introduced for individual and personal tax payers in 2004, it is now also mandatory for corporate to do so. Corporates filing returns through digital signatures need not furnish tax return papers while those filing through intermediates or who did not use digital signatures would have to supplement this through paper returns, he said.

The finance minister expressed hope that corporates would use the electronic mode in huge numbers to file their returns, the last date for which is October 31.

Referring to some teething problems that corporates may face while using the new system, Chidambaram reminded them that as new technologies are regularly used by them in their own domain of work, it would not be difficult for them to adapt.

For individuals, non-corporates and trusts, e-filing is not mandatory.  Explaining the rationale behind not making e-filing mandatory for them, Chidambaram said trusts are run by large numbers of people, many of who may not be tech-savvy adding that trusts would be the last entities to be asked to go for mandatory e-filing.

During the first half of this fiscal, the government collected 30.6 per cent more personal income tax and 47.9 per cent corporate income tax, Chidambaram said.

On the finance minister's budget announcement to expand the list of annual information returns, which are used to get information on high spenders, Chidambaram indicated that the list will indeed be expanded and there was still time for year to end.

Currently, there are seven categories of transactions, which come under AIRs, like deposits of Rs 10 lakh in banks in a year, investing Rs one lakh in shares annually and so on.

The Income Tax Department gets information on anyone engaged in these transactions and cross-checks their spending with their tax returns.

The finance minister also said the department will get government permission to recruit 3,300 persons in a special dispensation. The department will propose to fill another 7,000 vacancies to meet the current manpower shortfall, he disclosed.