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Transparent Taxation – Honoring the Honest

To honour the honest taxpayer, Hon’ble Prime Minister of India, Shri Narendra Modi, on 13th August 2020, launched the platform for Transparent Taxation. The main aim of this platform is to simplify compliances, make actions faceless, and expedite the refund process. To achieve these goals, this platform will use data analytics and artificial intelligence.

 

What is Transparent Taxation?

Transparent Taxation platform is an attempt to reform the direct taxes in India and to achieve a better interaction between the taxpayer and tax administration. The efforts here are to create a seamless, faceless, and painless tax system. ‘Minimum Government and Maximum Governance’ is the moto.

Why is Transparent Taxation introduced?

In the past several years, the government focused on:

  1. Banking the unbanked
  2. Securing the unsecured
  3. Funding the unfunded

However, because of the complexity of the taxation system, the compliance level has been low. But now, when the life of an honest taxpayer will be simplified, the country as a whole will develop and move forward.

With this reform, the government wishes to honour honest taxpayers for their pivotal role in national growth and development.

The major factors responsible for changes in the taxation system are:

  1. Policy-driven governance –  With clear policies in place, the grey areas in governance will reduce.
  2. Belief in taxpayers honesty
  3. Use of advanced technology
  4. Rewarding the bureaucracy for efficiency, Integrity, and sensitivity

Which are the major reforms under the Transparent Taxation platform?

This platform has three major reforms.

  1. Faceless Assessment
  2. Faceless Appeal and
  3. Taxpayers Charter.

Note: Faceless Assessment and Taxpayers Charter has come into force from 13 August 2020. However, the facility of faceless appeal will be available for citizens across the country from 25 September 2020.

Transparent Taxation

What are the key features and exceptions of this platform?

Key features of this platform include:

  • Random case allotment based on data analytics and artificial intelligence
  • Abolishment of territorial jurisdiction
  • Issuance of notices with DIN (Document Identification Number)
  • Minimum departmental visits and reduced physical interference for tax-related matters
  • Team-based assessment and review

However, this platform will not apply to cases related to:

  • Major frauds and tax evasion
  • International tax
  • Black Money Act
  • Benami Property

How will the Transparent Taxation platform work?

As mentioned earlier, this platform aims to enfold technology at its best. Data analytics and artificial intelligence will be the prime players here.

For example:

  • When we talk about assessments, a central system will pick up tax returns for scrutiny based on, risk parameters and mismatches and then will allot them randomly to officers located in different cities. To ensure accuracy, another set of officers located somewhere else will review the scrutiny orders issued by the first officers. In simple words, every assessment will be faceless and conducted by a team of officers under the concept of dynamic jurisdiction. With this theory, the age-old practice of territorial jurisdiction introduced under the colonial rule will stand abolished.
  • The taxpayers can reply to notices electronically, thus reducing the need to visit the income tax office personally.
  • The assessment order will be drafted in one city, reviewed in another, and finalised in the third city. This new system under the Transparent Taxation platform will end the era of acquaintance (Jaan-Pehchaan) to get cases settled.

These steps taken by the government are helping Indians march towards a new, self-reliant India.