 "tax, income, salary, rupee")
Thematically, the Budget speech was speckled with ideas around aspirational India, economic development, and building a caring society. A special focus was cast on strengthening agricultural and rural India, improving wellness and improving access to education. While several economic measures have been taken to implement this objective, an important unfinished agenda is the improvement of tax administration. Reform of tax administration is the final step towards ease of doing business in India and improved investor confidence. Finally, this should also support economic growth.
A positive step in this direction in the Budget announcements has been around the proposed inclusion of a ‘Taxpayers Charter’ in the income-tax statute, with a specific mandate to the Central Board of Direct Taxes (CBDT) to adopt the same for the benefit of taxpayers. While details of the same are awaited, it does create hope. Like all good ideas, its efficiency will only be determined by its implementation details. It will be beneficial to introduce a Taxpayers Charter across other taxes as well.
It is important to introduce an efficient dispute resolution mechanism to ease the pain of an overburdened dispute resolution machinery. There is a need for the constitution of a centralised independent body/council that will mediate with the taxpayer and resolve disputes in a timely manner. A consultative process between the authorities and the taxpayer will be welcomed by the taxpayer and will lead to quicker negotiated settlements. This will mitigate protracted litigation, free up the time of courts to attend to more critical matters, and provide speedy disposals.
With the conclusion of the Sabka Vishwas scheme under indirect taxes, which helped taxpayers close some of the legacy indirect tax disputes, attention is now placed on the 'Vivad se Vishwas' scheme which aims to reduce the direct tax litigation. This is one of the welcome measures of this year’s Budget proposal from a direct tax perspective.
There is a need to curtail the vast powers of investigation of tax authorities. Their obligations and rights during an investigation need to be elaborated and defined. Many a time powers are abused by field formations and taxpayers face harassment during investigations. There also should be more rigour in the nature and volume of information sought by the authorities in the course of an assessment.
With the increased digitisation and enhanced use of information and communication technology, a large amount of information is being exchanged digitally. While this is convenient for taxpayers, it does put pressure if the volume of the information sought is endless. Thus, efforts need to be made for defining and laying down the exact information needed during an investigation.
A positive step in this direction in the Budget announcements has been around the proposed inclusion of a ‘Taxpayers Charter’ in the income-tax statute, with a specific mandate to the Central Board of Direct Taxes (CBDT) to adopt the same for the benefit of taxpayers. While details of the same are awaited, it does create hope. Like all good ideas, its efficiency will only be determined by its implementation details. It will be beneficial to introduce a Taxpayers Charter across other taxes as well.
It is important to introduce an efficient dispute resolution mechanism to ease the pain of an overburdened dispute resolution machinery. There is a need for the constitution of a centralised independent body/council that will mediate with the taxpayer and resolve disputes in a timely manner. A consultative process between the authorities and the taxpayer will be welcomed by the taxpayer and will lead to quicker negotiated settlements. This will mitigate protracted litigation, free up the time of courts to attend to more critical matters, and provide speedy disposals.
With the conclusion of the Sabka Vishwas scheme under indirect taxes, which helped taxpayers close some of the legacy indirect tax disputes, attention is now placed on the 'Vivad se Vishwas' scheme which aims to reduce the direct tax litigation. This is one of the welcome measures of this year’s Budget proposal from a direct tax perspective.
There is a need to curtail the vast powers of investigation of tax authorities. Their obligations and rights during an investigation need to be elaborated and defined. Many a time powers are abused by field formations and taxpayers face harassment during investigations. There also should be more rigour in the nature and volume of information sought by the authorities in the course of an assessment.
With the increased digitisation and enhanced use of information and communication technology, a large amount of information is being exchanged digitally. While this is convenient for taxpayers, it does put pressure if the volume of the information sought is endless. Thus, efforts need to be made for defining and laying down the exact information needed during an investigation.
