The new tax regime: Faceless, fearless

Prime Minister Narendra Modi on Thursday appealed to individuals and businesses who are not paying their taxes to voluntarily come forward and become part of the tax base to help build a self-reliant nation.

Modi invoked the memory of people who gave up their lives in the independence struggle as he urged those outside the tax net to take advantage of the steps taken by his government to make tax administration easier, transparent and trust-based. Modi said that in the past six-seven years, the number of income tax return filers had gone up by 25 million.

“This is a big improvement. But we cannot deny that in spite of this growth, in a country of 130 crore people, this is very low,” he said. “Today, I appeal to people and to industry bodies. We have to search our souls. It is inevitable for a self-reliant India. This responsibility is not just of the tax department it is of every Indian. Those who can pay tax, but are not in the tax net, should voluntarily come forward.”

Modi’s appeal for voluntary compliance comes amid stressed finances that have prompted the government to scale up budgeted borrowings for the current year by over 53%. The money will go towards the ₹20 trillion economic package offered to households and businesses to help them deal with the coronavirus crisis.

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Modi also dedicated to the nation a programme for honoring honest taxpayers and for making tax collection fairer and taxpayers “fearless”. The programme covers the initiative of making assessments and appeals faceless. It also includes a taxpayer charter under which, effective Thursday an assessee cannot be doubted without a basis.

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The Central Board of Direct Taxes (CBDT) said on Thursday that all income tax assessments barring certain cases will be done under the faceless assessment scheme. CBDT has been running a pilot project since September 2019 after the faceless assessment scheme was introduced in law by the Finance Act of 2018. CBDT also issued an order saying income tax surveys, “an intrusive action,” should be carried out “with utmost responsibility and accountability.”

Faceless appeals will be allowed from 25 September, the birth anniversary of Deendayal Upadhyaya, a leader associated with the erstwhile Bharatiya Jana Sangh party. The tax system is becoming faceless. The taxpayer will get the feeling of fairness and fearlessness,” Modi said. The number of return filers rose from 35.1 million in 2014-15 to 63.3 million in 2018-19.

Modi said it cannot be denied that only 15 million people pay taxes in a country of 1.3 billion people. A government official said this was on account of the relief given in the interim budget of 2019 as per which individuals with a taxable income of up to ₹5 lakh need not pay any tax.

Finance minister Nirmala Sitharaman said CBDT has put in place a platform to realise Modi’s vision to empower taxpayers. “It uses, data analytics and AI… it eases compliance burden and brings in a fair and just system,” she said. The drive to honour honest taxpayers comes after a series of steps in recent months aimed at making the administration more accountable in its dealings with taxpayers.

Source: Live Mint

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