With the launch of 'Transparent Taxation - Honouring The Honest' Platform by Prime Minister Narendra Modi, the Income Tax department hopes to further their digitisation push. The COVID-19 pandemic has seen companies embracing digital options to ensure smooth business operations with the IT department the latest to adopt it.
With the online portal, the government claims that it will make the tax assessment and appeals process transparent while also making it easier for officials to analyse tax paying patterns better.
The two main features of the the new platform are faceless assessment and faceless appeals. Faceless assessment eliminates face-to-face interactions with taxpayers and Income Tax Department officers rely on a central computer to choose tax returns for analysis based on risk parameters and mismatch and assigning them randomly to officers. Faceless appeals, which will be launched on September 25, will see appeals being randomly allotted to any officer in the country with the officer's identity not being disclosed. The appellate decision will be team-based and reviewed.
Speaking to BOOM, Rahul Garg, Senior Partner at PricewaterhouseCoopers India said that the assigning of assessments and appeals, though random, will have some order to it. "The allocation being done randomly would still have some order in that randomness. This is like saying that on our digital health side, you could be allotted a doctor randomly. But if you have a heart problem, you would not be given an orthopaedic.
"Therefore, I would think that within the randomness, there would still be some order where you know that these people are specialised in this industry or in this business model or in this transaction and therefore that group of people who make the choice would not treat it as a blind random thing to be done at random," he says.
Apart from eliminating face-to-face contact between tax payers and officers, the Income Tax department's digital push will also help it in analysing the tax-paying patterns as well as identifying common issues that come up during assessments.
"You have an ability to run the analytics to see that whether similar tax payers in similar situations are similarly treated or not. So if you understand the mechanism of the e-assessment, it also has a layer of review. And the layer of review is to make sure that similar situations are similarly dealt with and that would bring a very different order of trust between the tax payer and the tax department," says Garg.
Given the difficulties faced by Indian business owners post demonetization and the implementation of GST, will the the new platform regain or further erode the trust business owners have in the system? Garg believes in the former.
"You should trust the system much more than you could have trusted otherwise because it is a matter of record. It is online, it is contemporaneous and it is not something which somebody could play you with. As a process, it is very mature and controllable and therefore that gives a lot of trust," says Garg.
"One of the duties listed for the tax payers in the tax charter is to keep proper records. This aspect has much more implications for the economy as a whole. The formalisation of economy would go to a very different level if all the tax payers start keeping the records. Because today, those records, if kept in digital form, become assets. A banker today may not give a loan to somebody who says their turnover is 30 lakh unless they have the digital record of their turnover. But if they keep the digital record of their turnover, they would not only end up complying with the tax laws, they would be able to monetise their revenue by creating a security against them," he adds.
Highlights
- Transparent Taxation - Honouring The Honest Platform is a step towards digitising the economy
- Faceless assessment and faceless appeal will reduce in-person interaction between tax payers and income tax department officers
- Digital tax records will help in proper maintenance of records
Watch the full video here.
