The income-tax (IT) department of India has selected Infosys Technologies to help set up a BPO center to carry out its routine work. This will be a great benefit to tax payers with refunds issued within three months of a tax filing and a call centre established to handle taxpayer queries while the IT officials focus on tax defaulters.

“Today, value-creating jobs are being crowded out,” Ajai Singh, member of the Central Board of Direct Taxes (CBDT), the tax department’s top decision-making body was quoted in the Mint. “The BPO for tax work is the department’s solution to the problem.”

Infosys will get paid Rs250 crore for the five-year contract. The decision to outsource routine paperwork to Infosys has yet to be ratified by the Union cabinet.

The first unit is expected to come up in Bangalore within the next six months. Three to four more such centres are expected to come up in two years.

The I-T department will provide space and Infosys will manage the rest—hardware, logistics to move scanned tax returns to CPC and software for data mining.

Even as direct tax collections from individuals and firms more than doubled in the three years to 31 March, the workload of tax officials has increased even more because of understaffing. The finance ministry estimated a 33% shortfall in assistant and deputy commissioners at the end of fiscal 2008.