PM MODI LAUNCHES PLATFORM FOR “TRANSPARENT TAXATION - HONORING THE HONEST”
10 Brief points of Prime Minister Modi’s speech
– 13th August, 2020 at 11:00 AM Indian Standard Time (IST)
TRANSPARENT TAXATION - HONORING THE HONEST
1. The taxation reform aims at:
Minimum Government and Maximum Governance.
Reduce interference of Government in the lives of the people.
Usage of maximum technology.
Boost Efficiency, Integrity and Sensitivity in Bureaucracy.
Change in both “soch and approach” of the entire taxation system.
2. Earlier, the reforms were made to cover the loopholes in the system which was reaction-oriented approach. Now the approach has shifted to action oriented where one reform should be the success stone of another reform and the reform making process should be a continue process in the nation.
3. To highlight some of the facts:
India now ranks 63 in the entire world for Ease of Business.
Foreign investment and foreign investors have gained an increased trust in Indian which is evident through huge Foreign Direct Investment (FDI) even during the lock down period pandemic.
4. It was necessary to bring Fundamental and Structural reform in the tax system. The income taxation system was continuing from the pre independence stage having the same structure, and because of this, the taxpayers suffered majorly due to many Income tax notices. This hurt the most to employer who are job givers and the youth of the country.
5. Some of the major changes in taxation system:
GST law which was again the most fundamental taxation reform which scrapped many tax laws to integrate into one tax law where everything is technology driven i.e. from return till refund process. This led to ease of doing business for entrepreneurs.
Also, unnecessary litigation have been reduced from the Government which again benefits the taxpayers of this country. For an example, the government shall file an appeal with the High Courts for cases more than Rs. 1 crore and with Supreme Court for cases more than Rs. 2 Crores there by reducing the litigation and saving time.
Vivad se Vishwas scheme helped in settlement of Services tax cases outside the courts.
There has been a positive change in the Income tax slabs too.
6. The taxation system must be:
Painless i.e. everything should be simple and
Faceless i.e. complete masking of the taxpayer and the tax officer
7. Announcement of the reform in Income Tax:
Earlier, the Income Tax department played a major role in the city where the taxpayer resides. Now, this system is being scrapped. Scrutiny can be initiated from any place in India which will be completely faceless and that will be done by the faceless team. The review of the order will also be done by a team having presence in different city all together. The selection of faceless team and review team will be made through a transparent computer system only, without any manual intervention. The process of appeals will also be completely faceless.
India is taking a major step of “Tax Payers Charter” which will streamline the Rights and Duties of the taxpayers. This will provide a sense of respect to the taxpayers from the Income Tax department. The Income Tax officers will not always have a doubtful eye on all the taxpayers. But the taxpayers have to keep in mind that rights always come with certain duties, and the duty shall be to pay taxes honestly. The Charter will provide Facility and Safety to all the taxpayers.
8. In the last few years, number of people filing Income tax returns have been increased by 2.5 crore people. The scrutiny of Income tax returns have reduced 4 times from 0.94% to just 0.26% which is the indicator of an effective implementation of taxation reform. However, still it is a despair that in a country of 130 crore people, just 1.5 crore people pay income tax.
9. The Honorable Prime Minister Modi invited all the people to come together and pay our taxes with utmost honesty. Taxes paid by the taxpayers helps in better facilities, better infrastructure and better services by the Government. Also, it shall be duty of the government to effectively utilize every single rupee of tax towards the betterment of the nation. This step will help to take India towards “Aatma Nirbhar Bharat”.
10. The Honorable Prime Minister Modi congratulated all the taxpayers for this new tax reform. He also congratulated all the people of Income tax department who came forward and gave their rights for the betterment of the nation.
CA. Sachet Agarwal - Partner VRAC