Faceless Income Tax assessment!
Two days prior to I-Day, Prime Minister Narendra Modi, released a slew of tax measures - a set of commitments and a transparent taxation system promising a rights charter for taxpayers.
On August 13, the PM said that the policy of transparent taxation was aimed at a journey of direct tax reforms such that taxpayers will not be harassed or treated with suspicion.
"The tax administration should be seamless so that it solves the problem instead of complicating matters. Technology and simple rules will make the system painless. And, faceless, in a way that the taxpaer and tax officer should not be bothered." he elaborated.
During the launch at New Delhi, the PM honored taxpayers stating that India was among few countries to give tax-payers their rights and dignity. "So far, the tax department in our city handled all issues. Scrutiny, notice, survey or confiscation, the income tax officer in the same city plays the principal role. In a way, this will end. Now, scrutiny cases will be allotted randomly in any part of the country... Under this system, a taxpayer will not have an opportunity to know people in the tax department or exert influence." added the PM.
"The platform has major reforms like faceless assessment, faceless appeal and taxpayers charter. Faceless assessment and taxpayers charter has come into force from today. The facility of faceless appeal will be available for citizens from September 25 on the birth anniversary of Pt Deen Dayal Upadhaya," he added.
"Now the tax system is going to become faceless but this will give believe to fairness and fearlessness to taxpayers. In the last 6 years, our focus was banking the unbank, securing the unsecured, funding the unfunded," said Modi.
"A new journey is beginning today honouring the honest. Country's honest taxpayers play an important role in nation-building. New facilities beginning from today establishes our commitment to minimum government and maximum governance," he added.
Modi's speech gains significance for a country where only 1.5 crore citizens pay their taxes as opposed to a population of 130 crores. To read more about Modi's speech, click here.
A few minutes after the launch, a government notification on tax-raids was released. With this, the Central Board of Taxes directed its brass, especially officers posted in directorates of investigation and Commissionerate of TDS (Tax Deducted at Source), that tax raids shall be conducted only post approvals from Director General of Income Tax (investigation) and Chief Commissioner for Income Tax (TDS).
The CBDT's face-less exercise commenced as early as September 2019 with the setup of a national e-assessment centre for faceless scrutiny of IT returns.
In July, the faceless system was touted as a game-changer with statistics suggesting that 58,319 cases were randomly assigned in an automated manner. Of this, 7,116 cases were settled and assessment orders were isued without any additions. The tool used for the e-assessment system is learnt to be built using latest digital technologies including artificial intelligence and machine learning, ensuring risk management. Explaining this major reform in the I-T processes, Finance Ministry sources said now almost 99 per cent returns were being filed electronically. Of more than 6 crore returns filed annually, only around 300,000 come under scrutiny on the basis of select risk parameters.
Cartoonist: Satish Acharya
Text: Sify, Finance Desk,