New Transparent Taxation System
Prime Minister Narender Modi on August 13,2020 launched the platform for “Transparent Taxation-Honouring the Honest” aimed at easing compliance and expediting refunds, benefiting honest taxpayers. This adds strength to our efforts of reforming and simplifying our tax system. It will benefit several honest taxpayers, whose hard work powers national progress.
What is Transparent Taxation?
Transparent Taxation means bringing greater transparency in the functioning of the center regarding tax reforms and compliance measures. PM Modi stated that the efforts aim to ensure a seamless, painless, faceless taxation system.
“Our effort is that our tax system should be Seamless, Painless, Faceless.
Seamless means that the tax administration should work to solve the problem instead of confusing every taxpayer. Everything from technology to technology to rules is simple” - PM Modi
The platform aiming to carry forward the journey of direct tax reforms was launched through a video conference. The Prime Minister highlighted that for the past six months, it has been their focus to honour the honest.
The event saw participation from various chambers of commerce, trade associations, chartered accountants' associations, and "eminent" taxpayers. Union Finance Minister Nirmala Sitharaman was also present on the occasion along with Minister of State for Finance Anurag Singh Thakur.
Compliance is also difficult where there is complexity. At least there should be a law, if the law is very clear, then the taxpayer is happy as well as the country. While the faceless assessment and taxpayers' charter reforms have been brought into effect from today itself, faceless appeal service will be available from September 25.
Three New Features:
Faceless Assessment
Faceless Appeal
Taxpayers' Charter
Faceless Assessment: Under the new system, faceless teams will take overall tax scrutiny matters. The faceless team will be chosen randomly by a computer, hence can be in any part of the country, not necessarily in the state where the matter comes up. This will help avoid unnecessary tax disputes.
Faceless Appeal: Tax appeals have also been made faceless. Under this, the taxpayer can make tax appeals without physically interacting with the tax collector.
Taxpayers' Charter: The Prime Minister highlighted that the taxpayer's charter is a big step in the country's development journey. Now the tax department will have to trust the taxpayers and will not be able to look at any taxpayer with distrust. The taxpayer will have the right to appeal in case of any dispute.
PM Modi said that the focus is on making the tax system “people-centric and public friendly.”
Four Factor Change:
The Government introduced a faceless income tax assessment to reduce the scope of corruption and overreach by officials.
The issue of alleged tax harassment by officers gained much attention in India after VG Siddharta, the founder of India’s Largest coffee shop Chain, committed suicide in July and left behind a note accusing tax authorities of persecuting him.
Why aren't tax Officials in comfort?
Tax officials are pushing back against the new faceless tax assessment program. They see problems in the lack of consulting and inadequate resources to implement the changes.
New Technology
The CBDT has given a framework and put in place a system in the form of this platform, a transparent, efficient, and accountable tax system. The platform will use technology such as data analytics and Artificial Intelligence. It will reduce the False notices from Income Tax and False Cases.
As far as the tax system is concerned, have:
Decreased complexity.
Decreased taxes.
Decreased litigation.
Increased transparency.
Increased tax compliance.
The increased trust of the taxpayer.
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