Income Tax (I-T) department has launched a number of schemes to make tax filing easier for the tax payers. One of them is faceless scheme where human interface has been eliminated between the assessing officer and the assessee. Another radical move was pre-filing of income tax returns where the tax return form contains pre-filled details of certain incomes.
Third is the taxpayer’s charter which reflects certain principal commitments of the Income Tax Department towards the taxpayer.
Finally, there is provision of updated return (ITR-U) where taxpayers are allowed to file an updated return so that they can update their return within a span of two years from the end of the relevant assessment year.
Here we share more details on the four key initiatives:
The procedures for assessment, appeal and levy of penalty under the Income-tax Act have been made faceless by eliminating the human interface between the Assessing Officer and the assessee, optimising use of resources through functional specialization and streamlining the procedures to enable efficient implementation.
Pre-filling of Income-tax Returns
In order to make tax compliance more convenient, prefilled Income tax Returns (ITR) have been provided to individual taxpayers. The ITR form now contains pre-filled details of certain incomes such as salary income.
The scope of information for pre-filing is being further expanded by including information such as house property income, capital gains from securities, bank interest, dividends, etc.
A new provision was introduced in the Finance Act 2022 to facilitate taxpayers to update their returns anytime within two years from the end of the relevant assessment year.
A taxpayer can file an updated return by voluntarily admitting omissions or mistakes and paying an additional tax as applicable.
A formal mechanism of first passively sharing information through Assessee Information System (AIS) and then actively sharing through e Verification scheme has been recently enabled.
Non-intrusive voluntary compliance through this two-pronged approach is devised to enable access to a taxpayer of information available with the Department and to nudge him to correct omissions/errors/oversights) by allowing updating of this return of income.
The Prime Minister launched recently a taxpayer’s charter that entails a number of key commitments of the Income Tax (I-T) department towards the taxpayer.
The charter was adopted by the Central Board of Direct Taxes (CBDT) as per the provisions of section 119A.
Among a number of promises the tax department makes, it assures to reduce the cost of compliance, provide a fair & just system and collect the correct amount of tax.
With this, India joins other a slew of economies in the world such as USA, UK, Canada and Australia which too have adopted and published Charter as a gesture of their commitment towards their taxpayers.
The charter will go a long way in strengthening the trust between the taxpayer and the tax administration. It will also help in enhancing the efficiency of the delivery system of the income tax department.