Prime Minister Narendra Modi, on Thursday, launched a platform "Transparent Taxation- Honouring the Honest" to encourage honest taxpayers as well as increase transparency in the tax system. He added that faceless assessment, faceless appeal, and taxpayer charter will be part of the new platform which is the Modi government's big new push to bring about tax reforms in the country.
This, he said, will boost the government's efforts of "reforming and simplifying our tax system." The prime minister, in his address, said, "This platform has big reforms such as faceless assessment, faceless appeal, and taxpayers charter. Faceless assessment, and taxpayers charter will come into force from today, whereas the faceless appeal service will be available from September 25."
The virtual event was attended by several trade associations, chambers of commerce, and chartered accounts' associations.
What is faceless assessment scheme?
Effective from August 13, the faceless assessment scheme aims to obliterate the human interface between the income tax department and the taxpayer.
Here are the key features of this scheme:-
- The taxpayer is selected through a system using Artificial Intelligence (AI) and data analytics.
- Territorial jurisdiction is abolished. What this means is that a taxpayer may be from a city but the income tax return (ITR) may be assessed in some other city through random selection by computer.
- Cases will be allocated on an automated random basis.
- Central issuance of notices with document identification number (DIN).
- No physical interface and taxpayers need not visit the income tax office.
- Team-based assessment and review.
- Draft assessment in one city, review in another city and finalisation in third city
Exceptions to Faceless assessment scheme:-
- Cases related to serious frauds, major tax evasions, sensitive, and search matters.
- The system also rules out international taxation, Black Money Act, and Benami Property.
What is the feature of faceless appeal?
The faceless appeal facility will be applicable from September 25. The feature will also try to check corruption and arbitrariness. Under the faceless appeal facility, in case of a complaint, the taxpayers will have the right to appeal to the officer, selected in a random manner. No one will know who the officer is. The tax assessee will also need not visit any office in person. A team of officers will take a final decision on the appeal and taxpayers will also have the right to get it reviewed.
What is the taxpayer charter?
Unveiling the faceless tax scrutiny and appeal, PM Modi said that the I-T department will also adopt a 'taxpayer charter' which outlines the rights and responsibilities of both tax officers and taxpayers. Announced in the Union Budget for FY21 by Finance Minister Nirmala Sitharaman, the charter will empower citizens by ensuring time-bound services by the I-T department.