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Factors ensuring independence to the taxpayers

CA Umesh Sharma 
on 18 August 2020

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Arjun (Fictional Character): Krishna, the taxpayer's charter has been announced by PM Modi on 13th August 2020. What is it about?

Krishna (Fictional Character): Arjuna, PM Modi divulged the taxpayer's charter by introducing the charter platform as “Transparent Taxation - Honoring the Honest“, that focuses on faceless assessment and faceless appeals. The aim of the charter is that of nurturing the relationship between the Revenue departments and the community that they serve, a relationship of mutual trust and respect.

Arjun (Fictional Character): Krishna, taxpayers would get independence from what compliances of the IT department?

Factors ensuring independence to the taxpayers

Krishna (Fictional Character): Arjuna, The Taxpayers Charter would free the taxpayer from tiring & burdensome compliances of the IT Department in the following ways:

  1. The Income Tax assessment shall be done completely faceless. 
  2. No local officer shall be involved in this process. Such a process shall be secretive to the taxpayer as well as tax officers, making it a seamless, faceless & tireless process.
  3. The taxpayers are given certain rights by the tax departments to be treated with fairness and impartiality, to be treated as honest and tax compliant unless there is evidence to the contrary, for assistance and information from the Tax Departments, to pay no more than the correct amount of tax, not to be subject to retrospective taxation, to minimize compliance costs, to be advised and represented by any person on taxation matters, to appeal, for the licit arrangement of your tax affairs that minimize the tax liability, to request a payment plan and to complain about our service, behavior, and actions.

Arjun (Fictional Character): Krishna, what is expected from taxpayers to ensure the independence of the Tax officers?

Krishna (Fictional Character): Arjuna, the taxpayer is expected to be honest, truthful and act within the law; give accurate and complete information as and when required; declare all assessable income and claim only deductions, rebates, and credits to which you are entitled. The IT department expects taxpayers to be compliant and cooperate when dealing with the Tax Departments & to keep proper records in accordance with the law. Further, the taxpayers should file proper and complete tax documents and effect payments by the statutory due dates and inform the Tax Departments about changes in circumstances if any.

 

Arjun (Fictional Character): Krishna, what are the key takeaways from the above?

Krishna (Fictional Character): Arjuna, reforms in Indian taxation have been centered on three concepts - seamless, painless, and faceless. Rankings of India in ease of doing business has significant growth. It has risen up from 134 to 63 in the world rankings that is impressive growth for India - in spite of only 1.5 Cr. Taxpayers, paying income tax out of 130 Cr. Taxpayers. For ensuring better compliance & transparency, some measures have been proposed by expanding the scope of SFT. Hope this will improve the quality of assessments, even if there would be more litigations at ITAT/HC/SC level due to difference of opinion of taxpayers & tax department, and give independence to taxpayers & tax department from the burdensome compliances.

 

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CA Umesh Sharma 

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