The Income Tax department is open to examining a proposal to exempt them from the annual chore.

Asked whether the department would think about doing away with Income Tax returns for employees, who had no other income apart from salaries in a financial year, Central Board of Direct Taxes chairman Sudhir Chandra said the department would certainly consider the proposal.

He agreed that for a substantial chunk of salaried employees, savings bank interest is the only additional income and that in most cases, this not substantial.

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This proposal, if approved, will benefit a large section of people and would reduce the I-T department's workload in a big way.

Of the country's 35 million taxpayers, roughly half are salaried employees.

The proposal to do away with returns for salaried taxpayers was earlier internally mooted within CBDT a few years ago.

The argument in favour of the proposal was that income records for this cl-ass of taxpayer were available with both employers and banks.

In an interaction with mediapersons on Tuesday, Chandra also promised small taxpayers another major relief.

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He said the I-T department is planning to release all small-value refunds before March 31. "I will ask my officials to give most refunds by the end of the current financial year," he said.

"We will try to clear most refunds in a month. At least small refunds can be given by March 31," Chandra added.

The newly-appointed chairman said he would communicate this to his officials.

Some of the refunds will be given to taxpayers directly through State Bank of India under the refund banker scheme.

Under this, tax refunds are sent to taxpayers by State Bank of India, either through the electronic clearing service mode or in physical form.

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The scheme was launched four years ago in Delhi and Patna and later extended to other cities.

In 2009-10, the I-T department gave over Rs 58,000 crore (Rs 580 billion) in refunds, which was 50 per cent more than the previous year.

CBDT has increased its target for processing refunds to Rs 70,000 crore (Rs 700 billion) in the current financial year.

Refunds increased by 19.5 per cent to Rs 44,000 crore (Rs 440 billion) up to December, 2010.

The I-T department has opened a Central Processing Centre in Bengaluru for faster processing of claims for electronically-filed returns.

It will roll out three more centres in the Manesar, Pune and Kolkata.

While the first two will come up within a year, the third will be operational in two years.