IT dept launches functionality for banks to check refund filing status

The Income Tax Administration said on Wednesday it launched a functionality for scheduled commercial banks to verify the status of income tax returns filed by entities based on their permanent account number (PAN).

It said data on cash withdrawals indicated that people who have never filed income tax returns are withdrawing a huge amount of cash.

To ensure filing of return by these persons and to keep track on cash withdrawals by non-filers, and to limit black money, the Finance Act of 2020, which came into effect on July 1, 2020, further amended the I-T Act,1961 to lower the threshold of cash withdrawal to Rs 20 lakh for a TDS application for non-filers.

TDS has also imposed a 5 percent higher fee on cash withdrawals exceeding Rs 1 crore by non-filers.

The Income Tax Administration has already provided a functionality 'Verification of applicability u/s 194N' for banks and post offices since July 1, 2020.

Through a notification on August 31, the Central Board of Direct Taxes (CBDT) included " scheduled commercial banks" in the list of agencies with which tax authorities can share information.

With this function, the bank/post office can obtain the applicable rate of TDS under Section 194N of the Income Tax Act of 1961 by entering the PAN of the person withdrawing cash, the CBDT said in a statement.

“The Department has now launched a new functionality 'Verify ITR Deposit Compliance Check' that will be available to Scheduled Commercial Banks (SCBs) to verify the IT Return filing status of PANs in bulk mode.

"The Principal Director General of Income-tax (Systems) has notified the procedure and the format for sending the notified information to registered commercial banks," said the CBDT.

The Tax Department said SCBs can automate the process and integrate it with the bank's core banking solution.

It added: " Scheduled Commercial Banks should document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure information security."

Source: Business Standard

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