Income Tax News | What is Income Tax Charter? Launched by PM Narendra Modi; All you need to know in details Narendra Modi implemented faceless assessment and taxpayer charter to encourage honest taxpayers and increase transparency in tax system. Prime Minister Modi implemented taxpayer charter; But what will change this?

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  • Income Tax News | What is Income Tax Charter? Launched by PM Narendra Modi; All you need to know in details Narendra Modi implemented faceless assessment and taxpayer charter to encourage honest tax payers and increase transparency in tax system

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  • Faceless appeal facility will start across the country from 25th September i.e. Deendayal Upadhyay's birthday
  • Prior to India, the taxpayer charter is in force in the US, Europe and many Gulf countries as well.

Prime Minister Narendra Modi on Thursday implemented the Faceless Assessment and Taxpayer Charter to encourage honest taxpayers and increase transparency in the tax system. With the birthday of Deendayal Upadhyaya on 25th September, the facility of faceless appeal will also be available all over the country. Also introduced special taxation platform.

First of all, what is a faceless assessment?

Last year, Finance Minister Nirmala Sitharaman proposed a faceless assessment. This means that the scrutiny of the tax returns will no longer be done by the Income Tax Officer, but this work will be done with the help of technology. It aims to eliminate the liaison between the taxpayer and the income tax officer. Assessment officer will not know whose returns he is assessing. This will prevent corruption. The problem of taxpayer will also be less.

How will there be a faceless appeal?

If the Assessment Officer has found any defect or mistake in the taxpayer's return, he can send a notice to it. But, even if the taxpayer has to appeal against him, he will not need to meet any officer. In the new system that will also be possible through electronic means.

What does the new system say about raids or surveys?

Till now, any income tax officer or authorized inspector could carry out survey or raid operations in his area. Now this will not happen. For this, he has to get the approval of Director General of Income Tax (Investigation) and Chief Commissioner of Income Tax (TDS). Actually, the survey is done under section 133A of the Income Tax Act. Under this, the investigation starts by suddenly entering someone's house. In such a situation, it can be done only with full accountability and responsibility.

Will the notices still come as before?

Notices will come, but the process has changed a bit. Along with that, immediate action will also be taken. All assessment orders will now pass through the National E-Assessment Center through Faceless Assessment Scheme 2019. Best Judgment Assessments have also been included in Faceless Assessments. If a taxpayer does not cooperate, the tax officer refers the tax assessment on the basis of his best judgment. Nagia & Co LLP partner Shailesh Kumar says this aspect is important in the new process. Taxpayers have to take care. If he does not pay attention, then his best judge can get adverse action done against him in the assessment.

What is this taxpayer charter nowThe

Taxpayer Charter is nothing new. Western countries like the US as well as Europe and Gulf countries have a taxpayer charter in force. In this, there is a mention of what facility the tax department will provide to the taxpayer. Also, what are the expectations of the department from the taxpayer, it has been told.

What if it is violatedThe

It is made on the basis of the provisions of the Income Tax Act. However, the charter is not a law in itself, but rather a resolution. If the officials of the Income Tax Department do not follow this, then there is no provision like imposing any penalty or penalty on them.

What promises the Income Tax Department has made in the Taxpayer CharterThe

By the way, there is nothing new in the promises made. Only, the Income Tax Department has told what it will do for the taxpayer:

  1. Will behave fairly and politely: The department's behavior will be helpful when dealing with taxpayer. He will help the taxpayer as a facilitator.
  2. Will consider taxpayer honest: This is a big deal because till now the tax authorities used to work only after realizing that the taxpayer had committed some wrong. He used to try to locate her. Now this will happen only if there is a valid reason.
  3. Appeal and Review Mechanism: The Income Tax Department has promised to provide impartial mechanism to taxpayers for review and appeal. It will also provide all accurate and complete information under the law to the taxpayer.
  4. Time will follow in the decision: The department will take decisions related to income tax proceedings within the stipulated time frame. Whatever amount is made by law, the same amount will be charged as tax.
  5. Privacy of taxpayer privacy and respect: The Income Tax Department shall follow the procedure laid down in law in any investigation, trial and enforcement action. Also respect the privacy and privacy of the taxpayer, unless the law states otherwise.
  6. Will make officers accountable: The department will provide proper training to its officers and make them available as facilitators. Will make them accountable.
  7. Taxpayers will be able to choose their authorized representative: Each taxpayer will be empowered to choose the authorized representative of their choice on behalf of the department. If taxpayer complains about any problem, then it will be resolved within the given time.
  8. The fair system will provide: The Income Tax Department will follow the deadline. All tax related issues will be resolved on time. A fair system will be available for this. Service Standards will be published. The report will be made after a certain period.
  9. Will reduce taxpayer expenses : The Income Tax Department will also take care that the taxpayer does not have to bear much expense in following the law. Efforts will be made to reduce the cost of compliance.

Will there be some responsibility on taxpayer tooThe

Of course. The taxpayer charter also prescribes some accountability for taxpayers –

  1. Implement taxpayer honestly: The taxpayer will have to give all the information related to his income honestly. He has to fulfill the obligations associated with his Compliance.
  2. Be aware of obligations to the law : The Income Tax Department wants the taxpayer to know what his obligations are under the Income Tax Act. If needed, he can also seek help from the department for this.
  3. Keep records accurate: Taxpayers must keep their records with precision. He has to keep his records in the prescribed format under the law.
  4. The activities of the representative should be known: If a taxpayer has appointed one of his authorized representatives, he should know what his representative is doing. He should know his activities.
  5. Deadlines must follow: The taxpayer is expected to follow the deadline in submitting all the information prescribed under the Income Tax Act. Will also pay tax on time.

What is the benefit of such a big exercise?

The income tax department has had a lot of fear in India for many years. Not everyone understands the complexity and people get nervous when they notice. All this exercise is to simplify the tax system. So that people can come forward voluntarily and collect tax.

Apart from this, in the budget also the government kept stressing that there is no need for more documents and it has reduced the need for tax related documents to a great extent. However, it is different that if you deposit tax in the old system then you will save.

What do the experts say?

Experts have welcomed it in one voice. But some have raised doubts on its implementation. Archit Gupta, CEO of Clear Tax, says that is a good move at the policy level. But it should also be reflected in the conduct of tax administration and tax authorities. For this, the tax authorities will have to be trained. Taxpayer has to be made helpful.

Similarly, Ritesh Kumar, executive director of Indus Law, said that till now the results of faceless assessment have been satisfactory. In critical matters, there is a scope to meet the officials personally and make their point. Tax scrutiny should be given on an Expertise basis, not a Randomize. This will reduce unnecessary litigation.

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