Economy

PM to unveil next phase of direct tax reforms on Thursday

Our Bureau New Delhi | Updated on August 12, 2020 Published on August 12, 2020

A platform for transparent taxation will be launched

Prime Minister Narendra Modi will unveil the next phase of direct tax reforms on Thursday.

“The upcoming launch of the platform for ‘Transparent Taxation – Honouring the Honest’ by the Prime Minister will further carry forward the journey of direct tax reforms,” a statement issued by the Prime Minister’s Office said. Though not much details have been shared, it is likely that the Prime Minister will talk about the Citizens’ Charter, as proposed in the Budget, besides other new initiatives such as the new phase of faceless assessment and the new mechanism to encourage taxpayers for voluntary compliance.

According to the statement, the Central Board of Direct Taxes (CBDT), the apex policy making body for corporate and personal income tax, has carried out several major tax reforms in direct taxes in recent years. Last year, the corporate tax rates were reduced from 30 per cent to 22 per cent and for new manufacturing units the rates were reduced to 15 per cent. Dividend Distribution Tax was also abolished.

Focus of reforms

The focus of the tax reforms has been on reduction in tax rates and on simplification of direct tax laws. Several initiatives have been taken by the CBDT for bringing in efficiency and transparency in the functioning of the IT Department. These include bringing more transparency in official communication through the newly introduced Document Identification Number (DIN) wherein every communication of the Department would carry a computer-generated unique document identification number. Similarly, to increase the ease of compliance for taxpayers, the IT Department has moved forward with pre-filling of income tax returns to make compliance more convenient for individual taxpayers. Compliance norms for start-ups have also been simplified.

With a view to provide for resolution of pending tax disputes, the IT Department also brought out the Direct Tax “Vivad se Vishwas Act, 2020” under which declarations for settling disputes are being filed currently. To effectively reduce taxpayer grievances / litigation, the monetary thresholds for filing of departmental appeals in various appellate courts have been raised. Several measures have been taken to promote digital transactions and electronic modes of payment. “The IT Department is committed to take the initiatives forward and has also made efforts to ease compliances for taxpayers during the Covid times by extending statutory timeliness for filing returns as also releasing refunds expeditiously to increase liquidity in the hands of taxpayers,” the statement said.

The event will see the presence of Finance Minister Nirmala Sitharaman, Minister of State for Finance Anurag Singh Thakur, representatives of various chambers of commerce, trade associations, chartered accountants' associations and also eminent taxpayers, apart from officers and officials of the Income Tax Department.

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Published on August 12, 2020
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