Just before the big 73rd Independence day of India, the respective prime minister decided to drop a bomb on the country’s taxation. PM Narendra Modi launched the platform for ‘Transparent Taxation on Thursday i.e 13th August – ‘Honouring the honest’ aimed at alleviating flexibility and facilitating returns, benefiting honest taxpayers.
The context for your insight-
The CBDT has carried out numerous significant tax reforms in direct taxes in recent years, including the latest being compression in corporate tax last year to 22% from 30% for subsisting corporations and 15% for new manufacturing segments. The dividend distribution tax was also eliminated.
The locus of the tax reforms has been on reduction in tax valuations and on simplification of direct tax laws.
Manifold initiatives have been taken by the CBDT for induction of effectiveness and transparency in the functioning of the IT Department, including Document Identification Number (DIN) and pre-filing of income tax revenues to make yielding more convenient.
While compliance criteria for startups have also been explained, the Direct Tax “Vivad se Vishwas Act, 2020” was brought out for settling conflicts and disagreements, many of which are being recorded currently.
The main and only goal of this is to effectively reduce taxpayer grievance.
- The taxpayer foundation had increased by 2.5 crores in the preceding seven years in the nation and it is a topic of critical concern that only about 1.5 crore bodies were requiting income-tax in a country of over 130-crore population.
- In the former arrangement, income-tax notifications had converted into an apparatus for despoiling taxpayers. It could not help extend the taxpayer base and somewhat created circumstances for the business of “black and white” to flourish.
- leading to money laundering, scams, and ghotalas, India has seen so many headlines from big-names enhancing the corruption rates.
- The government has now decided to adopt a people-centric approach toward establishing legislation, rules, and policies.
- The assessment conformity attempts to eradicate fraudulent practices by doing away with the provincial administration of income-tax offices.
- With the aid of technology, the cases of inspection will now be allotted randomly to any official in any part of the country and the document classification numbers will be dispensed from the intermediate central database.
- It is decided that authorities from now on in the Directorate General of Income Tax and the Principal Commissioner of I-T/Chief Commissioner of I-T will be the exclusively qualified authorities for establishing survey procedures to accumulate data for inspection and evaluation.
About the policy-
There are few things or highlights of this brand new formulation that were announced, which will surely catch a taxpayers’ eye.
- The focus is on making the tax arrangement “people-centric and public friendly.”
- The government launched a faceless income tax appraisal to lessen the extent of corruption and overreach by executives.
- It intends to bring transparency and clarity in income tax systems and empower the taxpayers.
- The main peculiarities of the platform are faceless assessment, faceless appeal, and taxpayer charter.
- The faceless assessment and taxpayer charter will come into place instantly from the launch, while the faceless appeal is going to be relevant from 25th September 2020.
- Faceless Assessment: It aims to eliminate the human interface between the taxpayer and the income tax department. It is programmed to select only through system and data analytics by utilizing Artificial Intelligence. With the aim of the abolition of terrestrial jurisdiction, it has introduced a system that required no physical presence- where the identification credentials will be required and random allocation of professionals will be done, all on your screen. A three-tier system where the drafts are assessed in one city, reviewed in another and final decision in the third city.
- Faceless Appeal: Under the system, appeals will be randomly allotted to any officer in the country. The identification of the deputy determining the motion will remain anonymous. As the features are already facilitated to the taxpayer, there is no need to even visit the office as well. The decision here made is team-based and reviewed by the professionals, cutting off the chance for malpractices in the department itself.
- Taxpayer Charter: This is the main feature introduced that outlines the rights and responsibilities of both tax officers and taxpayers. The income tax department is committed to providing prompt, courteous, and professional assistance and treating every taxpayer as honest unless there is a reason to believe otherwise. With a fair and impartial appeal and review mechanism, the department assures to provide accurate information, accumulating the right amount of taxes, and making timely decisions while respecting the privacy of the taxpayer and reducing the cost of compliance overall.
This model mainly works on the efficiency and co-operation of both parties, making it an example of transparency that is required in a government, especially when it’s related to our monetary contributions to the nation.
What are your duties?
As a taxpayer, the moral duty of any person is honesty. The government is making reforms to make our life less complicated and it’s our responsibility to fulfill the mere acts that are asked from us.
The only thing to keep in mind here is that if you are in no wrong and are out of trouble, nothing can harm you. You can start achieving that by paying your taxes on times, keeping full records of your expenses and required documents, and being informed about the ongoings related to it. Make sure you are aware of what information and submissions are made by your representative and its proffered on time.