The Centre on Wednesday said Information Technology company Infosys will develop a new income tax filing system, at a cost of Rs 4,241 crore, for the government. This will enable tax returns to be processed within a single day instead of 63 days, as at present.

Union minister Piyush Goyal said that the Union Cabinet granted “approval to expenditure sanction of Rs 4,241.97 crore for Integrated E-filing and Centralised Processing Centre 2.0 Project of the Income Tax Department”. At a media briefing, Goyal said the time required for filing tax returns will be reduced from 63 days to one day as a result of this new system.

Goyal said the project will take 18 months to complete, and it will be launched after three months of testing. He said the lowest bidder, Infosys, was selected to develop the system after a transparent bidding process.

The minister said that not only will returns be processed faster, but refunds will be made to the taxpayer’s account without any need for interface with the Income Tax Department. Goyal said the new system will enable to file accurate returns, solve taxpayer grievances, enable voluntary tax compliance and manage outstanding demand.

Under the new system, only 0.2% of those who file returns will need to get them rectified, compared to 5% at present, he added.