A 20 point Taxpayer Charter was launched by the Prime Minister which promises to maintain the privacy and confidentiality of income taxpayers and to reduce the cost of compliance with the tax laws.

The Income Tax department adopted the taxpayers’ charter w.e.f. August, 13, 2020, which mentions that it is committed to treat every taxpayer as honest, unless proven otherwise, and provide fair, courteous and reasonable treatment. The charter also states that it expects taxpayers to pay taxes on time and be honest and compliant.

In short, it defines the commitment of the tax department and the expectation from the taxpayers.

The charter was adopted following the Prime Minister’s launch of the platform ”Transparent Taxation – Honouring the Honest” which provides for launch of faceless assessment.

What is Taxpayers’ Charter?

The Taxpayers’ Charter was announced by the Finance Minister in her Budget 2020 speech with the aim of introducing the charter is to build a trust between a tax payer and the tax administration and reduce harassment.

With the objective of enhancing the efficiency of the delivery system of the Income Tax Department, the provisions of the Income Tax Act shall be suitably amended to mandate the Central Board of Direct Taxes (CBDT) to adopt a Taxpayers’ Charter,” FM said.

Tax payers can approach the Taxpayers’ Charter Cell under the Principal Chief Commissioner of Income Tax in each zone for compliance to this charter.

Income Tax Department’s commitment to tax payers:

To provide fair, courteous and reasonable treatment: The tax department will provide prompt, courteous and professional assistance in dealings with the taxpayer.

Treat taxpayer as honest: The income tax department shall treat every taxpayer as honest unless there is a reason to believe otherwise.

To provide mechanism for appeal and review: The tax department shall provide fair and impartial appeal and review mechanism.

​To provide complete and accurate information: The department shall provide accurate information for fulfilling compliance obligations under the law.

To provide timely decision: The department shall take decision in every income-tax proceeding within the time prescribed under the law.

To collect the correct amount of tax: The department shall collect only the amount due as per the law.

To respect privacy of taxpayers: The department will follow the due process of law and be no more intrusive than necessary in any inquiry, examination or enforcement action.

To maintain confidentiality: The department shall not disclose any information provided by the taxpayer to the department unless authorized by law.

To hold its authorities accountable: The department shall hold its authorities accountable for their actions.

To enable representative of choice: The department shall allow every taxpayer to choose an authorized representative of his choice.

To provide mechanism to lodge complaint: The department shall provide mechanism for lodging a complaint and prompt disposal thereof.

To provide a fair & just system: The department shall provide a fair and impartial system and resolve the tax issues in time-bound manner.

To publish service standards & report periodically: The department shall publish standards for service delivery in a periodic manner.

To reduce cost of compliance: The department shall duly take into account the cost of compliance when administering tax litigation.

Income Tax Department’s expectation from tax payers:

Be honest and compliance: Taxpayer is expected to honestly disclose full information and fulfil his compliance obligations.

Be informed: Taxpayer is expected to be aware of his compliance obligations under tax law and seek help of department if needed.

Keep accurate records: Taxpayer is expected to keep accurate records required as per law.

Know what the representative does on his behalf: Taxpayer is expected to know what information and submissions are made by his authorized representative.

Respond in time: Taxpayer is expected to make submissions as per tax law in timely manner.

Pay in time: Taxpayer is expected to pay amount due as per law in a timely manner.

The Welcome Step:

The taxpayer’s charter is a welcome step that enshrines in law the rights and duties of the taxpayers.

Though this was known to most of the taxpayers and officials, the introduction of an exclusive charter changes the perception of both the taxpayers and officials from taxpayers being scrutinised as offenders to being viewed as an equal stakeholder.

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Qualification: CA in Practice
Company: Sanjay Thampy and Associates
Location: Mumbai, Maharashtra, IN
Member Since: 22 Apr 2020 | Total Posts: 9
A practicing Chartered Accountant, I expertise in direct and indirect tax laws providing advisory services to various large and medium sized corporates. View Full Profile

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