The Tax Reforms launched by India's prime minister will significantly carry forward tax reforms in India, Ambassador of India B.Vanlalvawna said Report.
Through the Faceless Assessment Scheme, all income tax assessments in India will now be carried out in a faceless manner without any physical interface. Individuals need to respond only to scrutiny from the National e-Assessment Centre(NAC) regarding their taxes and not any other authority. The Faceless Assessment Scheme abolishes the need for the taxpayer to appear either personally or through a representative before an income-tax authority. The Scheme provides a dynamic jurisdiction under which a taxpayer can be assessed by an officer located anywhere irrespective of his geographical location. It is perhaps the first of its kind in the world's taxation system.
The Ambassador said that the 'Taxpayer's Charter' launched by the Prime Minister of India would make the country join other major economies in the world like the USA, UK, Canada, and Australia, which to have adopted and published Charter as a gesture of their commitment towards their taxpayers. The Prime Minister announced the Faceless Appeal Scheme to be implemented from the birth anniversary of PanditDeenDayalUpadhyaya i.e., September 25, 2020. The Scheme will allow the taxpayers to file their appeals in an automatic mode, which will be disposed of by a remotely located team and thereby save them from the need to visit the Income Tax Department physically. Additionally, the Ambassador also said that the Income Tax Department in India would no longer be permitted to carry out any intrusive action such as surprise visits to taxpayers' business premises.
Talking about other recent reforms to attract investments in India, Ambassador said that corporate tax rates in India had been gradually reduced since the implementation of the Finance Act 2016. Through Taxation Laws (Amendment) Act, 2019, an option has been provided to the corporate to pay tax at a concessional rate of 22% (plus applicable surcharge and cess) if they do not avail any exemption or incentive. Further, new domestic manufacturing companies set up after October 1, 2019, and starting manufacture on or before March 31, 2023, have been provided an option for paying tax at 15% (plus applicable surcharge and cess) without claiming specified exemption and incentive.
Earlier, reform in personal income tax through the Finance Act, 2020, has provided individual taxpayers with an option for paying income-tax at lower slab rates if they do not avail of specified exemption and incentive. Other measures include the abolition of the Dividend Distribution Tax to increase the attractiveness of the Indian Equity Market, exemption from income-tax for Sovereign Wealth Fund (SWF) and notified Pension funds earned from interest, dividend and capital gains in respect of investment made in the infrastructure sector, and continuation of concessional rate of 5% tax to be deducted at source for Offshore Borrowing till June 30, 2023.