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Reforms likely in existing tax system in budget 2018

BusinessReforms likely in existing tax system in budget 2018

In order to give a major push to Prime Minister Narendra Modi’s endeavour of taking India further up on the scale of ease of doing business, the Ministry of Finance headed by Arun Jaitley has planned to overhaul the existing tax assessment and investigation system for the country’s top companies. The measure is likely to be introduced in the coming budget, sources say.

A source in the Income Tax (I-T) department, told The Sunday Guardian: “The Ministry of Finance has asked the I-T department to come up with the plan which will allow less human interface and more use of technology in carrying out the assessment and investigation of tax returns filed by top companies.”

“The Ministry of Finance has also asked that a pilot project be launched to assess the feasibility of the proposed plan of reforming the tax collection system. However, the process of reform of the investigation system and easement of tax return is likely to take place in a full-fledged manner from the current financial year,” the same source cited above said.

“Under the new provisions, for all types of notices issued under various sections of the I-T Act, e-proceedings will be promoted. In case of more information sought by tax officials, the company’s response will not go to the same official, but the selection of assessment officials will be determined by an algorithm-based scrutiny process,” the same source quoted above said.

Progress in this direction has come after Prime Minister Narendra Modi’s speech in September 2017 in which Modi had asked the I-T department to decrease human interface and increase the use of technology so that there is less scope of corruption or extortion of money by corrupt tax officials. Following the PM’s direction, the I-T department had started working on the project.

According to sources, the government is also planning to roll out a pan-India based e-assessment procedure for income-taxpayers from the current financial year and, in this regard, the Central Board of Direct Taxes (CBDT) has already constituted a high-level committee to prepare a roadmap for the implementation of the Prime Minister’s ambitious project.

Amit Singhal, managing director of Satyam Consultancy, told The Sunday Guardian: “The new step will eliminate corruption by removing human interaction which makes the assessment procedure more transparent. The existing tax assessment system is quite complex and creates difficulties for the tax payer and promotes malpractices. The tax reform carried out by the Prime Minister will ease the pressure from taxpayers and increase the volume of taxpayers.”

A senior CBDT official said: “The new tax ­assessment and investigation system will be voluntary and taxpayers can choose either the paper-based existing system or the e-system.”

 

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