On Wednesday the government said that IT major Infosys will be developing the next-generation income tax filing system for Rs 4,241.97 crore aimed to cut down the processing time for returns to one day from the present 63 days and expedite the refunds.

The Cabinet has given its "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", the Union minister Piyush Goyal said while briefing the media about the decision.

Goyal said the project is being expected to be completed in 18 months and will be launched after three months of testing. Infosys was selected to implement the project through the bidding process. The new project is expected to be more tax friendly.

The e-filing and Centralised Processing Centre (CPC) projects, that are currently in use, have enabled end-to-end automation of all taxpaying processes within the Income Tax Department and promotes voluntary compliance. Tax refunds worth Rs 1.83 lakh crore have been issued so far in 2018-19 Goyal said. The Cabinet also sanctioned a consolidated cost of Rs 1,482.44 crore for the existing CPC-ITR 1.0 project up to March 2019.

The decision to bring advanced development to the tax filing system was taken to bring transparency and accountability besides faster processing of returns and issue of refunds to the taxpayers' bank account directly without any interface with the Income Tax Department, the official release said. Besides, it will also be promoting voluntary tax compliance and managing outstanding demand.