PM Modi unveils 'Transparent Taxation' reforms! What you must know?

Prime Minister Narendra Modi has, on Thursday, launched tax reforms to honor and encourage the honest taxpayers of the country, and the newly launched platform- 'Transparent Taxation - Honoring the Honest' has been noted as one of the major push for the country's taxation corridors and the platform has been cemented by the effort to make the country's tax system faceless, seamless, and painless. 

During his virtual address, the Prime Minister said that the country's honest taxpayers play a very big role in building the nation. The country develops and moves forward when the life of the taxpayers gets easier. He said that the effort is to make the tax system seamless, painless, and faceless. While seamless and painless denote solving the problem and making the process simple respectively, faceless means the absence of knowing the taxpayer and tax officer each other. 


The faceless assessment aims to eradicate the interface between the taxpayer and the income tax department. The reform would be terminating the territorial jurisdiction. The system enables the selection of the taxpayer only through systems using Artificial Intelligence and analytics. The system says that the taxpayer can belong to a particular city but the tax assessment of that particular taxpayer will be reviewed and finalized in different cities. 

Through the process, the taxpayer and the tax officer won't be having a direct interaction and the cases will be automatically allotted on a random basis. According to the reports, the taxpayer has no necessity to visit the income tax officer or the office in his jurisdiction. The assessment cases will be issued with the notices with a Document Identification Number (DIN). 


Along with unveiling the faceless assessment, the Prime Minister also unveiled the system of 'faceless appeal'. The Finance Ministry said that under the system of faceless appeal, the tax appeals will be randomly allotted to any officer in the country and the identity of that particular officer will not be known and the decision on the appeal will be team-based and reviewed. The teams to review the appeal would be from any city across the country. 

The Prime Minister stated that all the tax-related issues and concerns in the city are dealt and addressed by the Income Tax Office in that particular city till now and now with the help of technology, the review and scrutiny of appeal would be done by the Income Tax officer chosen randomly in the country and the taxpayer won't be required to visit the income tax office or the officer and the decision on the appeal will be team-based and reviewed. 

However, the finance ministry had given exceptions for some of the cases from the faceless assessment and appeal. These cases include major tax evasions, international tax, Black money act, serious frauds, Benami property, and sensitive matters. Apart from these exceptional cases, all other assessments and appeals would be done through a faceless interface as part of the new platform.

The Prime Minister has also launched the system of 'taxpayer charter' and the Income Tax department will be adopting the charter which highlights the rights and responsibilities of both tax officers and taxpayers. Following the launch, the Prime Minister said that the systems of faceless assessment and taxpayers charter will be available from Thursday - August 13 whereas the faceless appeal will come to effect from September 25.  The Prime Minister added that the government is making the process as the people-centric and public friendly. 

The Prime Minister further stated that the new tax reforms will change the way taxes are being paid in the country. According to the reports, the taxpayers charter is one of the components announced in the Union Budget 2020-21 and the charter would be empowering the citizens by ensuring time-bound services by the Income Tax department. In her Budget speech, Finance Minister Nirmala Sitharaman said that the charter will bridge trust between a taxpayer and the administration and it would increase the efficiency of the department and reduce harassment. 


On Thursday, during the launch of the Transparent Taxation reform, Finance Minister Nirmala Sitharaman said that the Prime Minister's vision is to empower the taxpayer, to provide a transparent system & to honour honest taxpayers. To realise this vision, CBDT has given a framework & put in place this system.