IT Department’s scheme of electronically assessing tax returns is made effective with the government’s announcement for e-assessment 2019 on Friday. This scheme of merging tax assessment with technology will make tasks easier for taxpayers at the same time eroding the chances of various tax frauds. Though there are no interactions between tax officials and taxpayers, personal representation is allowed under certain circumstances like appeals against assessments.
The scheme is initiated especially to reduce the human involvement in tax assessment and other tax-related scrutiny which in return will erase the chances of fraud or corruption.
The finance ministry had introduced an enabling provision for the scheme in the law through the Finance Act of 2018.
The department is accountable for the aftermath of the decision it takes, therefore, to ascertain the practicality of the new system, the government is running a pilot in every city since last few years.
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Experts believe that the new system will considerably reduce the taxpayer’s visits to income tax offices which will lead to ensuring privacy in tax-related proceedings.
Rakesh Nangia, managing partner Nangia Advisors says that tools like artificial intelligence, machine learning, video conferencing, and mobile applications are some measures that developed economies have already embraced in their e-assessment processes. The idea of e-assessment is applaudable but the goals can only be achieved when the administrative system is rigid and accountable to the needs of the taxpayer.
In case of an appeal, after completing the electronic scrutiny of assessment, appeals would be taken forward by the personal representatives or an appointed council.
Archit Gupta, Founder and CEO of ClearTax says that the scheme is going to establish transparency and polish the image of the income tax department. “As it is said that no kind of personal approach is accepted until it is requested by the taxpayer, which will also be conducted through video conferencing, this is a major step towards confidence building. All these provisions collectively will impact tax compliance positively,” said Gupta.