The Inland Revenue Department will grant an automatic one-month extension to all e-filers to encourage online filing of tax returns.

Commissioner of Inland Revenue Alice Lau said today the department is sending out 2.08 million individual tax returns. She reminded taxpayers to file their returns on time.

"As a one-month period is allowed for filing individual tax returns, the deadline falls on June 4 this year," Mrs Lau said, adding eTAX users filing their returns online will get a deadline extension to July 4.

For sole proprietors of un-incorporated businesses, a three-month period is allowed with a deadline of August 4, and it is extended to September 4 for eTAX filers, she said.

People with rental or business income can elect personal assessment to enjoy the 50% tax reduction announced in the Financial Secretary's Budget for 2009-10.

"The personal assessment election can be made in their 2008-09 tax returns. We will check, in each case, whether the election will reduce the amount of tax payable, and assess each taxpayer to his advantage," she said.

If a taxpayer is certain they will be earning significantly less in 2009-10 as a result of a cessation or change of employment, they can give details either by making a note on the tax return, or on a separate piece of paper.

As the deduction ceiling for approved charitable donations has been raised to 35% of the taxpayer's income, the department will enhance audits on donation claims to guard against abuse.

During 2008-09, $191.5 billion in revenue was collected, up $9.2 billion on the previous financial year.