Prime Minister Narendra Modi on Thursday, 13 August, launched a platform for 'Transparent Taxation – Honouring the Honest', and said that the platform has big reforms including faceless assessment and appeal, and taxpayers’ charter.
Pointing out that fundamental reforms were needed in the Indian tax system, Modi said the effort is to make the system seamless, painless, and faceless.
So what is this platform and what will it mean for tax-paying citizens of India? Read on.
What is Transparent Taxation?
Transparent Taxation is a platform or a new tax scheme to reward the “honest taxpayers” of the country and make tax compliance easier as part of the government’s initiatives to reform direct taxes in India. These reforms will change the way taxes have being paid in the country and make the process people-centric and public-friendly. The platform brings in big reforms like faceless assessment, faceless appeal, and taxpayers’ charter.
What is faceless assessment?
Faceless assessment is faceless tax scrutiny which eliminates the interface between the taxpayer and the income tax department. Under this system, the selection of a taxpayer will be done only through systems using data analytics and AI. Moreover, territorial jurisdiction will be abolished, and the draft assessment order, the review and the finalisation will take place in different cities. Cases will be also be automatically allotted on a random basis. Further, there will be no need for the taxpayer to visit the income tax office or the officer. Additionally, the appellate decision will be team-based and reviewed and any assessment, other than the exceptions to the faceless scheme, will be invalid.
What is faceless appeal?
Under this system, appeals will be randomly allocated to any officer in the country and the identity of officers handling the appeal will remain unknown. There will also be no need to visit the officer or the office. The appellate decision will further be team-based and reviewed. Exceptions to this will be cases of serious frauds, major tax evasions, Black Money Act, Benami property etc.
What is the taxpayers’ charter?
The taxpayers’ charter which was announced in the Union Budget for fiscal year 2020-21 sets down the rights and responsibilities of both tax officers and taxpayers. It is likely to empower citizens by ensuring timely services by the IT Department, holding itself accountable while also improving services for taxpayers.
When will these changes come into force?
Faceless assessment and taxpayers charter come into force from 13 August, whereas faceless appeal service will be available from 25 September.
How will these changes benefit a taxpayer?
The effort is to make India’s tax system smoother. The tax administration will work to solve the problem instead of engaging every taxpayer – attempting to simplify the process and ensuring it doesn’t matter who is paying tax and who is the tax officer. PM Modi also said that taxpayers will now be given the respect they deserve and trusted. The reforms are aimed at bringing about more trust, fairness, transparency, efficiency, accountability, ease and convenience and therefore, more compliance.
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