“TRANSPARENT TAXATION – HONORING THE HONEST” - A PLATFORM TO HONOR THE HONEST TAXPAYERS

“TRANSPARENT TAXATION – HONORING THE HONEST” - A PLATFORM TO HONOR THE HONEST TAXPAYERS

The Government of India has finally taken a step to honor the honest tax payers of India.

This step was long overdue and every taxpayer who is paying the tax on time with utmost honesty has got their due.
 

Prime Minister of India, Mr. Narendra Modi, on Thursday the 13th August 2020, have launched “TRANSPARENT TAXATION – HONORING THE HONEST” a platform to honor the honest taxpayers of the nation. This new platform has been launched with an aim to reduce the compliance load of the honest taxpayers and providing them their refund at the earliest.


While launching the platform through a video conference, the Prime Minister said that the nation has seen a major development in tax administration after the year 2014. The Prime Minister further said that in the last six years the tax reforms are mainly centered on 3 main concepts and they are – Seamless, Painless, and Faceless.

The government has taken various steps in order to ease the compliance burden, reduction in the tax rate, complex tax structure, litigation process, etc., and due to this system now has more transparency, better compliance, and trust of the taxpayers. 
 


 

Key features of the platform:
 
  • FACELESS ASSESSMENT
  • FACELESS APPEAL
  • TAX PAYERS' CHARTER

 
The Faceless Assessment and Tax Payer’s Charter came into force from today i.e. from 13th August 2020 but the Faceless Appeal will come into force from 25th September 2020.
 

1.  Faceless Assessment

The Faceless Assessment Scheme will help in removing human interaction. This means that the taxpayer and the income tax department do not have to meet for any tax-related matter. 

The feature of the Faceless Assessment Scheme is as follows:
Serial No Features
1 To select the taxpayer only by data analytics and AI system
2 Abolition of territorial jurisdiction. This means a taxpayer may belong to a particular city but the ITR may be assessed in some other city through random selection by computer.
3 Random allocation of cases
4 Central issuance of notices with Document Identification No.(DNI)
5 No physical interaction. Taxpayers need not visit the Income Tax Office
6 Team-based assessments and review
7 Draft assessment order in one city, review in another city, and finalization in the third city.

Exceptions 

There are few exceptions to the Faceless Assessment which includes the following:

  1. serious frauds, 
  2. major tax evasion, 
  3. sensitive and search for matters. 
  4. International taxation 
  5. Black Money Act 
  6. Benami Property.
     

“Hon’ble Prime Minister urged the taxpayers to come forward and pay taxes as part of their responsibility towards the nation.”
 

2.  Faceless Appeal

The faceless appeal will also help in abolishing human interaction. The taxpayers do not visit the Income Tax office or Tribunal court in case of making an appeal towards any tax-related matter.
 

Features of Faceless Appeal
  • Random allocation of appeal to any officer of the country
  • The identity of the officer who will decide on the appeal will not be disclosed.
  • The taxpayers are not required to visit any officer or the office
  • Assessment and review of the appeal will be done by a team.
     
Exceptions
  • serious frauds,
  • major tax evasion,
  • sensitive and search matters
  • International taxation
  • Black Money Act
  • Benami Property
     
3.  Tax Payer’s Charter

In the charter, the taxpayer’s privacy and confidentiality will be preserved and will also help in reducing the compliance cost. The charter list out –

  • Tax department’s obligation towards the taxpayers
  • Taxpayers obligation towards the department
     
Tax department’s obligation towards the taxpayers
  1. To provide fair, courteous, and reasonable treatment
  2. Treat taxpayer as honest
  3. To provide a mechanism for appeal and review
  4. To provide complete and accurate information
  5. To provide timely decision
  6. To collect the correct amount of tax
  7. To respect privacy of the taxpayers
  8. To maintain Confidentiality
  9. To hold its authorities accountable
  10. To enable representative of choice
  11. To provide mechanism to lodge compliant
  12. To provide a fair and just system
  13. To publish service standards & report periodically
  14. To reduce the cost of compliance
     
Taxpayers obligation towards the department
  1. To be honest and compliant
  2. To be well informed
  3. To keep accurate records
  4. To always keep a check on your representative and must have the information regarding all his acts done on your behalf
  5. To respond in time
  6. To pay in time
     

Various Tax Reforms have taken by the Government
 

A.  Reduction in litigation

Direct Tax Vivad Se Vishwas Act, 2020: -

  • Enacted on 17 March 2020 this act established a resolution process by which tax disputes can be settled in a speedy manner.
  • Raising of monetary limit for filing of an appeal has been raised from
  • Rs 20 lakh to Rs 50 lakh before ITAT.
  • Rs 50 lakh To Rs 1 crore before High Court.
  • Rs 1 crore to Rs 2 crore before the Supreme Court.
     
B. Reduction in tax rates and simplification of direct tax laws.

Taxation laws (Amendment) Act, 2019:

  • corporates are required to pay tax at a concessional rate of 22%.
  • Corporate tax for new manufacturing companies which are set up after October 2019 reduced to 15%.
  • No MAT applicable to such companies.
     

Finance Act, 2020-

  • Individual taxpayers to pay income tax at lower slab rates if they do not avail specified exemptions.
  • Cooperatives pay taxes at concessional rates without claiming any specified reduction or incentive. Abolition of dividend distribution tax
  • finance Act, 2020 removed dividend distribution tax with Effect from 1 April 2020.
  • The income from dividends is proposed to be taxed only in the hands of the recipients.
     
C. Ease of compliance for taxpayers
  • The faceless e-assessment scheme eliminates the interface between the assessing officer and the assessee.
  • It optimizes the use of resources through functional specialization.
  • Introduces the team-based assessment.
  • Every communication of the department issued from 1st October 2019 compulsorily to have system generated unique DIN.
  • Now ITR form contains pre-filled details of certain incomes.
  • Simple and Hassle-free assessment procedure, exemptions from angel tax, the constitution of dedicated startup cell. -Simplification of compliance norms for start-ups.
  • the threshold for launching prosecution increased
  • system of the collegium of senior officers for sanction of prosecution has also been introduced
  • compounding norms have been relaxed
     

Conclusion

Hope this new step of the government will be a blessing for the taxpayers who pay their taxes on time. 
 

Edited by Minu Mishra

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