Platform for Transparent Taxation- Honouring the Honest Taxpayer

Prime Minister Narendra Modi has launched the platform for ‘Transparent Taxation – Honouring the Honest’ on 13/08/2020 via Video Conferencing. In the past 6 years, India has witnessed the evolution of a new governance model in tax administration. Govt have decreased – complexity, taxes, litigation, and increased – transparency, tax compliance, and trust on the taxpayer. New platform aimed at easing compliance and expediting refunds, benefiting honest taxpayers.

K R Sekar, Senior Vice President-BCIC and Partner at Deloitte Haskins and Sells LLP said that “The Prime Minister’s vision of “Honouring the Honest Taxpayers” is a welcome move and very appropriate at this moment. The Government’s announcement of faceless assessment, faceless appeals, and use of technology to issue Document Identification Number (DIN) to taxpayers is most welcome and it will address the most fundamental issue which the taxpayers have been raising on bias and harassment. The faceless scheme of assessments and appeals will help to create confidence and enhance the taxpayers’ trust. Further, the taxpayers charter providing commitment by the Income-Tax Department on multiple issues including protecting taxpayer’s information, providing a fair and just system, and ensuring the accountability of revenue officials is very encouraging. I am sure the fair and transparent tax administration as announced by FM under the vision of PM will enhance the credibility and improve the functioning of the department. This move will ensure better compliance better administration and more important and just and fair system.”

Kumarmanglam Vijay, Partner, J Sagar Associates said that “Proposed reforms launched by the Prime Minister to simplify assessment and appellate process coupled with initiative to provide pre-filled return forms to taxpayers are steps towards making the process technology driven and easy to comply for a common person. Government has rightly increased the thresholds for appeals to be filed by the Revenue to reduce litigations. These steps may significantly improve the direct tax to GDP ratio in going forward after reforms are fully implemented. “

Three main features of the platform are faceless assessment, faceless appeal and tax payers’ charter.

Platform for Transparent Taxation 

KEY FEATURES & EXCEPTIONS OF THE PLATFORM

KEY HIGHLIGHTS

Key highlights of PM Modi’s speech today (13 August) on Tax Reform:

1. Faceless Income Tax Scrutiny – Now, Income tax assessment shall be done completely faceless. No local officer shall be involved in the process. Such process shall be secretive to tax payer as well as tax officers.

2. Seamless, faceless and tireless process now.

3. Faceless Income Tax Appeals

4. No issue on transfer posting of Income tax officers

5. Only 1.5 Crores Indian pays Income Tax out of 130 Crores. Hence should come forward to pay their taxes properly.

6. In last 6 year, about 1500 law have been abolished by Modi’s Govt. for ease of business in India.

7. Introduced Tax Payer’s Charter, wherein the commitment of Income tax department and expectations of the Tax Payers have been set.

Hope, this will improve the quality of assessments, even if there would be more litigation at ITAT/HC/ SC level due to difference of opinion of Tax Payers and Income Tax Department.

NEW REFORMS

Todays’ Declaration with Respect to Tax Reforms by PM Modi:

1. FACELESS & PAINLESS Taxation from Now Onwards.

2. Tax Charted Applied from Now Onwards.

3. Fair Tax Payer to get Fair Tax System.

4. Appeals will also be Faceless

5. Less Government and More Governance.

6. Most use of Technology and More use of Artificial Intelligence.

7. Less Law and Clear Acts to avoid discrepancies.

8. Tax Charter applied from Now Onwards.

9. India Ranked 63 from 134 in Ease of Doing Business.

10. Income Tax Payers accounts shall be scrutinized anywhere in Whole India. And Review of the Order to be done anywhere in Whole India.

11. Tax Paying and Collecting and using it for System should act as a Responsibility and not as rigorous forced actions.

APPLICABILITY DATE

CBDT has given a framework and put in place a system. A transparent, efficient accountable taxation is what the platform brings in. It uses tech, AI, data analytics. The new platform aims to ease compliance burden, fair objective fair system. Faceless assessment, Faceless appeal, taxpayer charter apply from today. Faceless appeal will be applicable from Sept 25^th, 2020

WAY FORWARD

Right now, the tax department of the city we live in handles everything. Now this is over. With technology, matters of scrutiny will be assigned to IT department officials randomly. The computer will decide it. This will keep changing constantly.

Article Contributed by:

Sagar Gambhir | FCA, DISA (ICAI) | [email protected]

Author can be reached at [email protected] for any queries, issues & recommendations relating to article.