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By Tuesday evening, nearly two crore Indians will have filed their income tax data online. Ever since the inauguration of the online railway ticket reservation in the 1980s, few events will have as dramatically illustrated the changing nature of the government-citizen relationship. The changeover from paper filing to e-filing has been so sweeping that the income tax department has found it possible to close its annual melas at the end of July, like the one at Pragati Maidan in New Delhi, a showpiece event and a demonstration of rising tax compliance by middle-class Indians.
E-filing has been made compulsory for only those with an annual income of over Rs 10 lakh. But as the 1.64 crore filers from last year showed, this is a good habit others too are willing to adopt. E-filing of one of the most significant pieces of paperwork for the expanding middle classes also demonstrates how corruption can be cut down. As successive reports by think tanks have shown, elimination of personal contact between government employees and citizens is possibly the best way to do this. This becomes possible as the process grows transparent, which means in the next stage citizens can even get accurate statistics about the government revenue collection machinery. Beyond corruption, the e-filing procedure has solved the storage problem for the mountain of files that physical returns generated and freed up time for the income tax department employees to scrutinise many more returns.
In fact, the tax department's impact on a largely urban population replicates earlier developments in rural areas. Bhoomi in Karnataka, online birth and death registration in most of southern India and even the emerging banking correspondent models have already shown the way forward.
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