Transparent Taxation Platform Launched – A Key Tax Administration Reform

– PM Narendra Modi on 13th August, 2020 launched the platform for ‘Transparent Taxation – Honoring the Honest’ aimed at easing compliance and expediting refunds.

– The Government announced following key measures to drastically reduce the Government interference, influence and bureaucratic discretion:

  • Faceless Assessment introduced (Effective from 13 August 2020)

– As per the announcement, tax payer will not be required to visit the income tax office or the officer. Therefore, it will eliminate the human interface between the taxpayer and the income tax department.

– Under this new scheme CBDT has set up regional E-assessment centers across 20 cities. Each of these regional centers will report to the National e-assessment Centre (NeAC) that will issue randomized notices of scrutiny.

The Faceless assessment scheme will also include ‘best judgment assessments’ in cases where the taxpayer is not cooperating with the tax authorities.

  • Faceless appeal (effective from 25 September 2020):

– As per the measures announced, the Appeals will be randomly allotted to any officer in the country and the identity of the officer deciding the appeal will remain unknown. As a result, it will substantially reduce the corruption as possibility of influence will be zero.

  • Taxpayer Charter (Effective from 13 August 2020):

– It is also announced that, the tax authority will treat every tax payer honest unless there is a reason to believe otherwise. Further, Fair and impartial system will be provided to resolve the dispute in timely manner.

– Further it was also stated that, the tax department to hold the authorities accountable for their actions and taxpayer will be provided with mechanism to launch complaints from now.

Our comments:

  • The government has been consistently taking steps to encourage people and population at large for voluntary compliances and will lead to taxpayer’s satisfaction, increase in direct tax collections, and further
    simplification of tax legislation and ease of doing business.
  • The intention of government is clear and we can expect structural reforms to ease the process, in coming years.