Mon. Sep 28th, 2020

PM Modi announces major tax reforms ..

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New Delhi, 13 Aug (HS): Prime Minister Narendra Modi on Thursday announced key tax reforms. The new platform “Transparent Taxation – Honouring the Honest” carries forward the journey of direct tax reforms in India, such as “faceless appeals” where taxpayers don’t have to visit offices to rectify errors. PM Modi said that the facility of faceless appeal will be available to citizens across the country from  September 25 coinciding with Deendayal Upadhyay’s birthday.
Finance Minister Nirmala Sitharaman, who also attended the virtual event today, said the reforms “mark an important step forward in providing a simple and transparent taxation regime for India”.
“The taxpayer will now be given the respect they deserve. The taxpayer will now be trusted, not looked at with doubt. The (tax) department will have to carry out the steps and processes in a time-bound manner,” PM Modi said.
“When we talk of faceless taxation, what it means is that the taxpayer and the tax officer have no interaction, as should be the case. There should be no contact between the tax officer and taxpayer. This has potential to reduce interference, and empowers the taxpayer,” PM Modi said.
The Central Board of Direct Taxes or CBDT has carried out several major tax reforms in direct taxes in the recent years, the statement pointed out. Last year, corporate tax rates were reduced from 30 per cent to 22 per cent, and for new manufacturing units, the rates were reduced to 15 per cent. Dividend distribution tax was abolished.
The centre maintains the focus of the tax reforms has been on reduction in tax rates and on simplification of direct tax laws. Several initiatives have been taken by the CBDT for bringing in efficiency and transparency in the functioning of the Income Tax Department.
This includes bringing more transparency in official communication through the newly introduced Document Identification Number or DIN, where every communication of the department would carry a computer-generated unique identification number.
“Today, in personal income tax, the slabs have reduced a significant amount… up to ₹ 5 lakhs is now tax-free. Other slabs have gone down too. Even for corporate taxes, India is among the nations that charges the least corporate tax,” PM Modi said.
“From 2013 to 2019, the scrutiny of tax returns has reduced from 0.93 per cent to 0.2 per cent, which means that the scrutiny has reduced four-fold in the last five years,” PM Modi said.
For better compliance and easing the tax-filing process, the Income Tax Department has moved forward with pre-filling of income tax returns for individual taxpayers.