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PM Modi launches Transparent Taxation platform to benefit honest taxpayers

On 13th August 2020, Honorable Prime Minister Narendra Modi has announced  a platform to tribute the honest taxpayers of the country and ensuring awareness about honest tax payment in India.

The inauguration of the Transparent Taxation” program happened at 11 am through video conferencing. The “Transparent Taxation” platform will work to create major reforms meant to establish more transparency in income tax systems and empowering taxpayers in the country.

Three main features of the platform are faceless assessment, faceless appeal and tax payers' charter, Narendra Modi announced.

Key Points

The Transparent Taxation Platform:

  • It is aimed at bringing transparency in income tax systems and empowering taxpayers.
  • The main features of the platform are faceless assessment, faceless appeal and taxpayer charter.
  • The faceless assessment and taxpayer charter will come into place immediately from the launch, while the faceless appeal is going to be applicable from 25th September 2020.
  • Faceless Assessment: It aims to eliminate human interface between the taxpayer and the income tax department.
  • There will be no need for the taxpayer to visit the income tax office or the officer.
  • The selection of a taxpayer is possible through systems using analytics and Artificial Intelligence.

Faceless Appeal: Under the system, appeals will be randomly allotted to any officer in the country. The identity of the officer deciding the appeal will remain unknown.

Taxpayer Charter: This outlines the rights and responsibilities of both tax officers and taxpayers.

Other Recent Direct Tax Reforms:

The Central Board of Direct Taxes (CBDT) has carried out several major tax reforms in direct taxes in recent years. The focus of the tax reforms has been on reduction in tax rates and on simplification of direct tax laws.

  • Corporate Tax rates were reduced from 30% to 22% in 2019. For new manufacturing units the corporate tax rates were reduced to 15%.
  • Dividend Distribution Tax was also abolished in 2019.

The CBDT has also taken several initiatives for bringing in efficiency and transparency in the functioning of the Income Tax (IT) Department, such as:

  • Bringing more transparency in official communication through the newly introduced Document Identification Number (DIN) wherein every communication of the Department would carry a computer generated unique document identification number.
  • Pre-filing income tax returns to increase the ease of compliance for taxpayers and to make compliance more convenient for individual taxpayers.
  • Direct Tax Vivad se Vishwas Act, 2020 to provide for resolution of pending tax disputes.
  • Taxpayers' Charter lists down their commitment towards the taxpayers and the expectations from the taxpayers as under:

Commitment towards the taxpayers:

  • Provide fair, courteous and reasonable treatment;
  • Treat taxpayer as honest and tax compliant unless proven guilty;
  • Provide a mechanism for appeal and review;
  • Provide complete and accurate information;
  • Provide timely decisions;
  • Collect the correct amount of tax;
  • Respect the privacy of the taxpayer;
  • Maintain complete confidentiality;
  • Hold its authorities accountable;
  • Enable a representative of choice;
  • Provide a mechanism to lodge complaints;
  • Provide a fair and just system;
  • Publish service standards and report periodically;
  • Reduce the cost of compliance.

Expectations from the taxpayers:

  • To be honest and compliant;
  • Be informed about the consequences of non-compliance;
  • Keep accurate records in accordance with the law;
  • Know what the representative does on his behalf;
  • File complete and correct documents within the  timeframe;
  • Pay taxes in stipulated time.

Read More about What is faceless appeal, taxpayers Charter, Faceless assessment, SFT : Here is what Income Tax filers must know

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