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Transparent Taxation : Honoring the Honest – Analysis

Author: S K AGRAWAL AND CO CHARTERED ACCOUNTANTS LLP; Published on: August 19, 2020

Two days before Independence Day i.e., on 13th of August 2020, the Hon’ble Prime Minister Shri Narendra Modi launched a platform “Transparent Taxation: Honoring the Honest” to honor the honest Taxpayer. Vide this platform, reforms like “Faceless Assessment”, “Faceless Appeal” and “Taxpayers Charter” are introduced.  The Key highlights of the same are listed below:-

• Faceless assessment and Taxpayers Charter came into effect from the 13th of August 2020 while faceless appeal will be applicable from the 25th of September 2020.

• Taxpayers can avail of the new income tax regime from this financial year onwards and enjoy the benefits of relatively less documentation and greater ease of compliance increased liquidity in the hands of the taxpayer and flexibility of investment choices.
• The emphasis is on making every rule, law, and policy people-centric and public friendly.
• New arrangements and new facilities starting today, strengthens commitment towards ‘Minimum Government, Maximum Governance’. This is a big step in the direction of reducing interference of the government in the life of the countrymen.
• 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. Artificial Intelligence and Data analytics will be used for team-based assessment and review of the cases.
• Apart from issues related to assessment, appeals will also be faceless. The identity of the officer deciding appeal will remain unknown. The appellate decision will be Team-Based & Reviewed.
• The department is helping taxpayers to be able to understand how to fill pre-filled tax forms. The new platform aims to ease compliance burden, fair objective fair system.
• Intrusive surveys cannot be undertaken by the field officers. Only the Investigation wing and TDS wing officers can do the same after taking approval from an officer of the level of Chief Commissioner.
• CBDT has carried out several major tax reforms in Direct Taxes recently, some of which are as under: –

1. 1. Last year, corporate tax rates were reduced from 30% to 22%, and for new manufacturing units, the rates were reduced to 15%.
   2. The dividend distribution tax was also abolished.
   3. To increase the ease of compliance for taxpayers, the IT Department has moved forward with the prefilling of income tax returns to make compliance more convenient for individual taxpayers.
   4. Compliance norms for startups have also been simplified.
   5. For the resolution of pending tax disputes, the IT Department also brought out the Direct Tax “Vivad se Vishwas Act, 2020”,
   6. To effectively reduce taxpayer grievances and litigation, the monetary thresholds for filing of departmental appeals in various appellate courts have been raised.
   7. The IT Department has also made efforts to ease compliances for taxpayers during the COVID-19 pandemic by extending statutory timeliness for filing returns, as also releasing refunds expeditiously to increase liquidity in the hands of taxpayers.
   8. Scope of Reporting of specified financial Transaction is also expanded.

To download the complete notes, please click here Transparent Taxation – Honoring The Honest