With an increasing focus on streamlining tax administration, the Income Tax (I-T) Department recently announced three official email IDs for registering grievances. This move is part of the Faceless or e-Assessment Scheme, a key structural tax reform under the ‘Transparent Taxation – Honouring the Honest’ platform. Inaugurated by the Prime Minister in August 2020, this initiative aims to simplify tax processes and reduce disputes.
Understanding the Faceless or e-Assessment Scheme
In an effort to promote efficient tax administration, the faceless assessment system was introduced. Launched in 2019, the system eliminates the need for taxpayers to visit I-T department offices or interact with officials for income tax-related matters. The significant objectives of the scheme include minimising physical interaction and introducing team-based assessments, thus increasing accountability.
Mechanism and Advantages of the Faceless Assessment Process
The Faceless Assessment operates through different units within the tax department, with each unit having a specific role in the process. Assessment units, verification units, technical units, and review units are all involved in implementing the scheme. These units interact with the National e-assessment Centre (NeAC) and Regional e-assessment Centre (ReAC) to ensure seamless operations.
One of the significant advantages of this scheme is that it offers greater flexibility for taxpayers and professionals interacting with tax authorities. Moreover, the system has resulted in notable time savings due to the elimination of travel to tax offices and waiting time therein.
Recent Initiatives Connected to the Faceless Assessment Scheme
As part of the 2021 budget, the Finance Minister proposed forming a Dispute Resolution Committee (DRC). The DRC is intended to provide rapid relief to taxpayers involved in tax disputes. It is specifically designed to help small taxpayers with taxable incomes up to Rs. 50 lakh and disputed incomes up to Rs. 10 lakh.
Another recent initiative is the ‘Vivad Se Vishwas’ Scheme. Aimed at resolving disputes related to tax, interest, penalties or fees linked to assessment or reassessment orders, this scheme allows for settlement by paying 100% of the disputed tax amount and 25% of the disputed penalty, interest or fee.
With these initiatives and reforms, the Indian tax system aims to become more accessible and user-friendly, addressing taxpayers’ grievances through digitization and simplification of processes.
