The proposal was approved by the Union Cabinet at a meeting this evening.

"This would be after the end of the existing contract period on September 30th 2015 and for revision of the CPC project cost to Rs 1,078.59 crore," an official statement said after the Cabinet meeting.

"This decision has significant benefits for the Department and taxpayers, including, better taxpayer services, savings in interest outgo, better recovery of outstanding tax payments, and freeing up departmental manpower for handling higher scrutiny and investigation work.

"The decision will ensure horizontal equity by processing almost all returns filed by all categories of taxpayers across the country in a consistent, uniform, rule driven, identity blind manner. This will assure fairness in tax treatment to every taxpayer irrespective of their status," it added.

The Centre helps enable faster processing of returns and issue of refunds to the taxpayer's bank account directly without any interface with the Department/ It also provides processing status updates and speedy communication using email, SMS and on the Tax Department website.

The government said that the decision to extend the contract and revise the project cost "will ensure transparency and accountability".

"The proposal ensures the continuation of the Department`s goal towards business transformation through technology. The CPC has enabled end to end automation of all processes within the Department using various innovative methods to provide taxpayer services and to promote voluntary compliance," it added.

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