PM Modi Unveils Faceless Tax Assessment Scheme
NEW DELHI : Prime Minister Narendra Modi today introduced faceless tax assessment and appeal, which aimed at streamlining the tax-paying process for people and reducing the scope for corruption and over reach by officials.
“The country’s honest taxpayer plays a big role in nation-building… A faceless tax system will give the taxpayer confidence on fairness and fearlessness,” the Prime Minister said in a video address after rolling out the ”Transparent Taxation – Honoring the Honest” platform in a big push for tax reforms.
PM Modi said a “faceless appeal facility” will be available to all citizens from September 25, which is Deen Dayal Upadhyaya’s birth anniversary, and the initiatives will strengthen the efforts of “reforming and simplifying our tax system”.
Unveiling the platform via video conference, the Mr Modi said, “While the number of people filing income tax returns has increased by about 2.5 crore in the past few years, actual taxpayers at just 1.5 crore out of a population of 130 crore is very very less.”
“Taxpayers will now be given the respect they deserve. The taxpayer will now be trusted, not looked at with doubt. The tax department will have to carry out the steps and processes in a time-bound manner,” the Prime Minister said.
The taxpayers’ charter was announced in the Union Budget for fiscal year 2020-21 by the Finance Minister. The facility is likely to empower citizens by ensuring time-bound services by the Income Tax Department.
The government through this move also wants to improve tax compliance. It expects people to voluntarily pay taxes if they fall in the tax slab. Faceless appeal service will come in force from September 25.
What is faceless appeal?
Under this, if a taxpayer makes an appeal, it will be randomly assigned to any officer across the country. The identity of the officer deciding the appeal will not be revealed. The appellate decision will be team based and it will be reviewed. In this case, a person will not have to go to I-T office. Exceptions to the faceless appeal include serious frauds, major tax evasions, Black Money Act and Benami property.
What is faceless tax assessment?
This step is aimed at eliminating the human interface between the taxpayer and the Income Tax Department. Now, what will happen is, a taxpayer will not have to visit I-T office and the new system has also done away with territorial jurisdiction.
Taxpayers will be selected for assessment with the help analytics and Artificial Intelligence (AI) and their cases will be allotted on a random basis. It means the case of a taxpayer who may be residing in Delhi can be assigned to an officer in Mumbai. The assessment will be team-based.
However, the government has provided some exceptions for faceless assessment. It will not include cases of serious frauds, major tax evasion. Matters related to International tax, Black Money Act and Benami Property also don’t come under the ambit of this system.
What is taxpayer charter?
A taxpayer charter lists out commitments of tax officers and responsibilities of taxpayers. People can now reach out to the Taxpayers’ Charter Cell under the Principal Chief Commissioner of Income tax in each zone to ensure compliance.
Meanwhile, The CBDT has carried out several major tax reforms in direct taxes in the recent years, including the latest being reduction in corporate tax last year to 22% from 30% for existing companies and 15% for new manufacturing units. Dividend distribution tax was also abolished. The focus of the tax reforms has been on reduction in tax rates and on simplification of direct tax laws.
Several initiatives have been taken by the CBDT for bringing in efficiency and transparency in the functioning of the IT Department, including Document Identification Number (DIN) and pre-filling of income tax returns to make compliance more convenient.
While compliance norms for startups have also been simplified, the Direct Tax “Vivad se Vishwas Act, 2020” was brought out for settling disputes, many of which are being filed currently.
To effectively reduce taxpayer grievances or litigation, the monetary thresholds for filing of departmental appeals in various appellate Courts have been raised.
(With Agency Inputs ).
