The Government of India, under the Transparent Taxation
initiative, launched the Taxpayers Charter on August 13, 2020. The main intention behind this massive step is to foster the relationship between the Revenue Department and the citizens of India. It aims to achieve this by listing out the following:
- Various commitments targeting improved transparency, better accountability and ease of compliance;
- Expectations from taxpayers to assist the Department in meeting their goals.
To comply with the Charter, the Taxpayer can approach the Taxpayers' Charter Cell under the Principal Chief Commissioner of Income Tax in each zone.
In this article, we will elaborate on the:
Commitments of the Income Tax Department
The implementation of the Charter spells out the following commitments that the Income Tax Department must adhere, to protect the rights of the Taxpayers:
1. PROVIDE FAIR, COURTEOUS, AND REASONABLE TREATMENT
The Department must treat all the taxpayers' in a well-mannered way. They must provide courteous and fair treatment and handle all matters in a professional mode.
2. TREAT TAXPAYER AS HONEST
The attitude of the officers against the assessees should be 'innocent until proven guilty' rather than vice versa. The taxpayers should not be subject to unwarranted scrutiny unless the officials believe they have evidence which is antithetical.
3. PROVIDE MECHANISM FOR APPEAL AND REVIEW
When aggrieved by an assessment order, the Taxpayer should have specific remedies such as the ability to appeal to higher authorities or a review mechanism that is fair and impartial.
4. PROVIDE COMPLETE AND ACCURATE INFORMATION
The Department is expected to keep the taxpayers up to date with their compliance obligations. It is already doing this to a certain extent by sending reminders for advance tax instalments, displaying due dates for filing of various types of returns on its website, etc.
5. PROVIDE TIMELY DECISIONS
The passing of the assessment order will have to be done within the time frame prescribed by the law. Further, the Department should also ensure that prompt response is given to all the taxpayers' enquiries and requests.
6. COLLECT THE CORRECT AMOUNT OF TAX
The Department has to be righteous and fair with all their proceedings. They have to collect only the tax amount that is legally due from the Taxpayer and must ensure that all the rightful deductions, credits and exemptions are duly allowed. For example, the introduction of new disclosures in form 26 AS
facilitates the proper calculation and collection of tax.
7. RESPECT PRIVACY OF TAXPAYER
The Taxpayer can be saved from undue distress while carrying out the process of inquiry, examination or enforcement action by minimising intrusion as much as possible.
8. MAINTAIN CONFIDENTIALITY
Income tax returns contain complete financials and other disclosures that are sensitive. The Department should maintain the confidentiality of all such information collected from the Taxpayer and ensure such information is shared if required by law only.
9. HOLD ITS AUTHORITIES ACCOUNTABLE
There should be a mechanism to improve accountability for the actions of the various income-tax authorities, especially where they fail to conform to the Charter.
10. ENABLE REPRESENTATIVE OF CHOICE
The assessee has the right to appoint a tax representative recognised under the tax laws to handle his/her proceedings on his/her behalf. The Department may be kept informed of such representations.
11. PROVIDE MECHANISM TO LODGE COMPLAINT
The Department has already provided the facility to lodge grievances easily, either physically or by visiting the official website
. Further, E-Nivaran, a unified grievance management system, has been launched that integrates all the complaints received and enables fast-tracking of the same until a solution has been drawn.
12. PROVIDE A FAIR & JUST SYSTEM
Taxpayers should be treated well; the Department is expected to behave with integrity. It should resolve problems promptly and make fair decisions as per the law.
13. PUBLISH SERVICE STANDARDS AND REPORTS PERIODICALLY
Establishing standards for service delivery will definitely help speed up the dispute resolution and ensure that the same quality of service is maintained.
14. REDUCE COST OF COMPLIANCE
The Department has to reduce the compliance costs by making it easier for the taxpayers to understand their tax-related obligations and help them save time and effort by reducing their workload. The pre-filling of some of the information in the tax returns seems to be a step towards achieving this measure.
Obligations of Taxpayers
To keep up with the commitments mentioned above, the Department also requires the help of taxpayers and lists out the obligations of the Taxpayer in the Charter. The obligations include:
1. BE HONEST AND COMPLIANT
The conduct of the Taxpayer is expected to be free of deceit by acting within the law and disclosing all the relevant information as and when required. He/she has to ensure that all the assessable income has been rightly declared and should not claim for deductions, rebates and credits to which he/she is not entitled.
2. BE INFORMED
While the Department is committed to providing all the information that is required for compliance obligations, it is the Taxpayer's responsibility to ensure that they read such information and keep themselves updated about changes in any of the tax laws. The Department may be approached in case of any queries or assistance in this regard.
3. KEEP ACCURATE RECORDS
Maintaining the books of accounts and other prescribed documents as per various applicable laws will help the Taxpayer and the tax authorities arrive at the correct computation of tax. The Taxpayer must not engage in any manipulation of such records with the intention of misleading the Department.
4. KNOW WHAT THE REPRESENTATIVE DOES ON HIS/HER BEHALF
The Department gives the Taxpayer the right to appoint a representative. However, it is the responsibility of the Taxpayer to keep himself/herself updated with regards to the information and submissions made on his/her behalf. The Taxpayer will be held responsible for all actions done by the authorised representative on his/her behalf.
5. RESPOND IN TIME
The Taxpayer has to ensure that all the tax details are furnished and submitted in the required format to the Department within the prescribed time frame. Replies to notices, answering queries raised during assessments, filing of returns and other documents should be done promptly.
6. PAY IN TIME
The taxpayers are expected to pay the tax amount on time to avoid any penalty or interest which will follow due to late payment. This includes the payment of advance tax instalments, self-assessed tax and any increase in taxes due to additions made by the assessing officer as a result of his assessment.
While most of the measures mentioned in this Charter already existed in some form or the other, it is reassuring to see the Department make prowess by reiterating those measures and continuously making improvements wherever possible.