Faceless Tax Scheme: 7 Things You Need to Understand
- Sankalp Mishra
- Aug 20, 2020
- 2 min read
On 13th August 2020 PM Modi unveiled the platform “Transparent Taxation - Honouring the Honest” virtually. The E-assessment scheme announced by Finance Minister Nirmala Sitaraman was announced in her budget speech in 2019 and shall henceforth be known as Faceless Assessment Scheme. The scheme is aimed at reducing human interference in the assessment proceedings. The shift has been towards rationalisation, simplification, greater transparency, ease of paying taxes, and creating an overall taxpayer-friendly ecosystem. The system will ensure uniformity of approach and uniform application of law-making, and make the assessment process more efficient and friendly for the taxpayer. Let’s take a look at how it will work to achieve these objectives:
THE PROCEDURE
For the purpose of faceless assessment the Central Bureau of Direct Taxation (CBDT) shall set up ‘centres’ under which shall lie ‘units’. National e-Assessment Centre (NeAC) has been set up in New Delhi. There are 30 evaluation centres across 20 cities including Delhi, Mumbai, Kolkata and Chennai. Each of the regional centres, which has a separate review unit and verification unit, which will report to the National e-Assessment Centre (NeAC), will issue randomized notices of scrutiny.
National e-Assessment Scheme serves notice to the assessee which they have to respond to, within 15 days. The taxpayer’s case gets assessed under e-assessment only when a taxpayer fails to furnish an income tax return voluntarily or in response to a notice asking a taxpayer to furnish a return.
The National e-Assessment Centre will assign the case to an ‘assessment unit’ in any one ‘Regional e-Assessment Centre’ through an automated allocation system using AI and send them all the information related to the assessment. After examining all the information, REAC will prepare a draft assessment order and forward it to NEAC, where finally the fine shall be imposed on the assessee, if any.
The assessee can also contact the department without visitation at the comfort of his home. Any issues faced by the assessee can be cleared by putting through the queries via registered mail ID at anytime.
BENEFIT TO THE TAXPAYERS
The new approach is a citizen-centric one. Earlier the taxpayer had to visit the department’s office for scrutiny, which made it prone to malpractice and corruption. Under the new system, there is no scope for individual discretion and subjective judgement. The anonymity promotes objective, fair and just assessment orders.
The faceless assessment system also fosters voluntary tax compliance and is rewarding to the honest tax-payers. Without the need of visiting the territorial jurisdiction tax officers, the overall assessment process has also become faster, efficient and reliable.
The faceless assessment system not only ensures transparency and efficiency, but also projects growth in the tax base. It promotes a swift tax administration, and boosts the confidence amongst the honest tax-paying citizens while retarding any leeway of malfeasance.
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