PM Modi launched the Transparent Taxation Scheme on Thursday via video conferencing. The scheme that intends to “honor the honest” offers three major reforms, namely: faceless assessment, faceless appeal, and taxpayers charter.
Here’s everything you need to understand about the new Transparent tax scheme:
“Till now, all tax-related matters in a city are dealt with by the Income Tax department of that city. Now with the help of technology, scrutiny will be done by a randomly chosen IT officer anywhere in the country,” explained PM Modi in his announcement.
Under the faceless appeal system, the appeals put forward by the citizens will be allotted to a random officer while the identity of the officer remains anonymous.
The procedure is further simplified as the taxpayers will no longer have to visit the income tax office or the officer. The final decision regarding the appeal will be concluded by the team of officers.
The only exceptions include cases of serious frauds, major tax evasions, Black Money Act, and Benami property.
Seeks to get rid of the interaction between the taxpayer and the officer. Herein, the taxpayer will be selected via systems using analytics and AI, making the procedure entirely random. It will further eliminate territorial jurisdiction. It will now be possible for a taxpayer from one part of the nation to be connected to an officer from a different city. Automatically allotted on a random basis. The appellate decision will be team-based and reviewed whereas assessments outside the scheme will be considered invalid.
According to PM Modi, the taxpayer charter will focus on maintaining privacy and confidentiality standards while attempting to reduce the cost of compliance with tax laws.
The charters list the commitments that the income tax department is supposed to comply with along with a list of expectations that a taxpayer is supposed to meet.
The handle of taxpayer charter came into effect starting August 13, 2020.
In addition to these basic reforms, the scheme further attempts to widen the income tax base while keeping a check on tax evasion. With the implementation of the latest scheme the white good purchases, property tax payment, medical and life insurance premium, and even hotel payments will be taken into records such as –
- Payment of educational fee/ donation above Rs 1 Lakh
- Electricity consumption above Rs 1 Lakh
- Domestic business class travel or foreign travels
- Hotel bills exceeding Rs 20,000
- Purchasing of jewelry, paintings, marbles, white goods above Rs 1 Lakh
- Deposit/ Withdraw of more than 50 lakhs Rupees for current account and 25 Lakhs Rupees for Saving accounts
- Payment of property tax above 20 Thousand Rupees
- Life insurance premium worth of Rs 50,000 or above and Health insurance premium above Rs 20,000
- People having a Demat account, share transactions, or a bank locker.
Shortly after the Prime Minister’s speech, Minister of State for Finance and Corporate Affairs, Anurag Thakur took to twitter in an attempt to explain the scheme with an uncomplicated approach.
Under the transparent taxation scheme, faceless assessment and taxpayers’ charter will be implemented from Thursday as it does not require the taxpayer to engage in one-to-one interactions. Whereas, the faceless appeal will come into force from September 25.