Prime Minister Narendra Modi on Thursday assured taxpayers of rightful, courteous and sensible behaviour from the Income Tax Department, while urging all those who are capable of paying tax to join the tax net on the basis of their self-inspiration.

“The Income Tax Department will need to honour the dignity of a taxpayer and keep sensitivity in mind,” Modi said while launching the platform for “Transparent Taxation-Honoring the Honest”. With this platform, the government has initiated the taxpayers’ charter and faceless assessment in India, while a facility for faceless appeal will start from September 25.

The taxpayers’ charter defines rights and obligations of taxpayers as well as the tax department. It was announced in the Union Budget earlier this year. “We wish to enshrine in the statutes a ‘taxpayers’ charter’ through this Budget. Our government would like to reassure taxpayers that we remain committed to taking measures so that our citizens are free from harassment of any kind,” Finance Minister Nirmala Sitharaman had said.

New taxation behaviour

The taxpayers’ charter has listed 14 types of commitment from tax officials and six obligations of taxpayers. Commitments include fair, courteous and reasonable treatment; treating the taxpayer as honest; providing a mechanism for appeal and review; providing complete and accurate information; providing timely decisions; collecting the correct amount of tax; respecting the privacy of the taxpayer; maintaining confidentiality; holding authorities accountable; enabling representative of choice; providing a mechanism to lodge complaints; providing a fair and just system; providing service standards; and reducing cost of compliance.

Under the charter, the tax department expects taxpayers to be honest and compliant; be informed; keep accurate records; know what the representative does; respond on time; and pay on time.

Faceless assessment is jurisdiction-free assessment, wherein the taxpayer will not know who is assessing his tax return. He will not be required to visit the office of tax officials. All communication will be online and officials will also be picked up online. Faceless appeal refers to a mechanism here where appeal against action of the tax department can be filed and disposed off online

Increasing tax compliance

Modi said taxpayers should be assured that the tax department will not suspect taxpayers without any reasonable doubt. He acknowledged that the number of taxpayers have gone up by 2.5 crore during the last six-seven years. “This number could be big, but not when we consider a population of 130 crore. In fact, there are just 1.5 crore people effectively paying tax,” he said, asking people to discuss within their selves how this can be improved. Thinking within self will help in achieving self-reliance, he emphasised.

Acknowledging the efforts of the tax officials, Modi said that complaints and litigations have come down. “There is increased transparency, tax compliance and trust,” he said.