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The income tax department should do everything possible to be seen as "responsible, responsive and transparent," besides adopting a policy of 'guidance over intimidation' when dealing with taxpayers, the CBDT chairman has said. On the 164th anniversary of direct tax administration in India, Ravi Agrawal, head of the country's centralised body for execution and related policy-making under the department, suggested that taxmen should follow an approach called 'PRUDENT'. CBDT is part of the Depart
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FAQ :
The CBDT Chairman has directed tax officials to adopt a policy of 'guidance over intimidation' when dealing with taxpayers, aiming to be seen as responsible, responsive, and transparent.
PRUDENT is an acronym representing a blueprint for tax officials, standing for Professionalism, Responsible and responsive field formations, Understanding transactions, Dedication and due diligence, Effective enforcement, Non-intrusive administration, and Technology-based tax administration.
The tax department is shifting its focus from being largely an enforcement or adversarial institution to one providing 'supportive services' to help assessees maintain compliance through non-intrusive methods, aided by technology.
Technology, including deep analytics and artificial intelligence, is crucial for identifying potential cases, but the handling of these cases should prioritise guidance with empathy. A third-generation, tech-enabled tax administration is emphasised for process simplification and enhanced taxpayer ease.
Non-intrusive governance aims to foster a friendly relationship with taxpayers, encouraging compliance with tax laws and procedures through 'nice nudges' rather than forceful methods.
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