FeaturedStoriesTrends

What is the new Faceless Tax Reform which will make taxpayers feel Fearless? Explained!

On Thursday Prime Minister Narendra Modi unveiled a forum to respect the country’s honest taxpayers. He said it will be a new milestone in the Government’s initiated structural reforms.

“The ‘Transparent Taxation – Honoring The Honest’ platform will bring in faceless assessment, faceless appeal, and taxpayers’ charter. Faceless assessment & taxpayers charter come in force from today, whereas faceless appeal service will be available from September 25, In the last six years, but the focus has been banking the unbanked and securing the unsecured. Today, a new journey begins – honoring the honest” PM Modi said in his video conference address.

The Prime Minister said the new reform would instill a sense of fearlessness amongst honest taxpayers who play a major role in national growth.

The charter and faceless assessment of taxpayers are the next phases of direct tax reforms that seek to ease enforcement and reward honest taxpayers as the government aims to restore the pandemic-hit economy.

Hon’ble PM announced the platform for Transparent Taxation to Honour the Honest,

Faceless Appeal Scheme to be implemented from 25th September 2020 which will bring a new era of Trust, Transparency, and Tax. #HonoringTheHonest #TaxReforms

This will help to bring efficiency, transparency, and accountability in tax administration. It will also save taxpayers time.

Out of all the tax returns in the year 2012-13, there was scrutiny of 0.94%.

In the year 2018-19, this figure has come down to 0.26%.

That is, the scrutiny of the case has reduced by about 4 times.

The New Tax Reform:

Faceless assessment –

(A PLATFORM FOR TRANSPARENT TAXATION – HONORING THE HONEST, FACELESS ASSESSMENT FACELESS APPEALS TAXPAYERS CHARTER)

Under the system, appeals will be randomly allotted to any officer in the country. The identity of the officer deciding the appeal will remain unknown.

Features:

  • Selection only through the system using data analytics & Ai
  • Abolition of territorial jurisdiction
  • Automated random allocation of cases Central issuance of notices with Document Identification No. (DIN)
  • No physical interface. No need to visit the income tax office
  • Team-based assessments and Team-based review
  • Draft assessment order in one city, review in another city & finalization in the third city

Exceptions:

CASES RELATING TO:

  • Serious frauds, Major Tax Evasion, Sensitive & Search matters
  • International tax
  • Black Money Act & Benami Property
  • Any assessment, other than the exception, outside Faceless Scheme will be invalid
  • No intrusive and survey actions by field officers – Only Investigation wing and TDS wing can after approval by an officer of the level of Chief Commissioner or above

Total Transparency –

A NEW ERA OF TRUST, TRANSPARENCY & TAX

Features:

  • Appeals to be randomly allotted to any officer in the country
  • The identity of officers deciding appeal will remain unknown
  • No need to visit the officer/office
  • The appellate decision will be Team-Based & revised

Exceptions:

CASES RELATING TO:

  • Serious frauds, Major Tax Evasion, Sensitive & Search matters
  • International tax
  • Black Money Act & Benami Property

Widening the Tax Base-

(ENSURING BETTER COMPLIANCE & TRANSPARENCY)

Deduction/collection of tax (TDS/TCS) on nri transactions

  • TDS on Cash withdrawal above 1 crore (20 lakh for Non-filers)
  • TCS on the motor vehicle above 10 Lakh
  • TCS on Foreign remittance under LRS above 275 lakh/ overseas tour packages
  • TDS on e-commerce suppliers & TCS on purchase of goods above 750 Lakh

Expansion of scope of Reporting of transactions (5FT):

  • Cash deposit/withdrawal of 750 lakh or more in the current account
  • Cash Deposit of 210 lakh or more in noncurrent account
  • Sale of foreign exchange above 10 lakh
  • The reporting of transactions of mutual funds credit card transactions, immovable property, etc rationalized

Compulsory filing of return:

  • Deposit above Rs 1 crore in current account Expenditure of 2 lakh on foreign travel electricity consumption above 1 lakh.

Similarly, to increase the ease of compliance for taxpayers, the IT department has moved forward with the pre-filing of income tax returns to make compliance more convenient for individual taxpayers. Compliance norms for startups have also been simplified.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker