NEW DELHI: Finance minister Nirmala Sitharaman on Wednesday urged the income tax department to follow a faceless, fair and friendly regime and ensure that communication was in simple language that did not frighten taxpayers.
While thanking honest taxpayers at the 165th Income Tax Day celebrations, FM stated there were almost 59 lakh first time tax filers this year.”I can see the tax net widening. We need such examples which will showcase to the world that India is getting more formalised,” she said.
She said that 72% of the individual taxpayers had moved to the new tax regime. “…this very clearly shows that this has been now accepted as a very well thought through system, wherein the rates are simple… no compliance headaches, and therefore has become very attractive,” Sitharaman said
Sitharaman said there was room for improvement in issuing refunds faster, although the process has been significantly improved in recent years. Asking taxmen to avoid “ham-handed ways” in dealing with taxpayers, the minister said that the action taken should be proportional to the issue at hand.
She also asked taxmen to use enforcement measures only as a last resort, and the goal of the department should be to encourage voluntary compliance.
Sitharaman pointed to the Budget to outline the major objectives – simplification, improved services, tax certainty and lower litigation.
She said that there was a lot of work happening across all focus segments. Within the next six months, at least some parts of the I-T Act will be written in simple and easy to understand language with an internal committee already tasked with the job, she said.
“Improving taxpayers’ experience is something on which I want all of you to pay attention. Like the new tax regime, the same approach should be followed in one-on-one interactions… If the notice also has to showcase the language, it can frighten the assessee. Language should be simpler and devoid of technical words. Can we explore easy, simple to understand notices so that our communication is accessible? Can you also explain the reason behind any action taken and also the reason why the notice has to go in the first place,” FM said.
Sitharaman said that often the language used was such that it raised more questions and required a clarification from the department. The minister’s comments came in the wake of several instances of the income tax department having to resort to issuing explanations for tax proposals or FAQs since they were not easily understood, or the implications of a move were unclear.
The minister also urged authorities to address grievances as a priority.
While thanking honest taxpayers at the 165th Income Tax Day celebrations, FM stated there were almost 59 lakh first time tax filers this year.”I can see the tax net widening. We need such examples which will showcase to the world that India is getting more formalised,” she said.
She said that 72% of the individual taxpayers had moved to the new tax regime. “…this very clearly shows that this has been now accepted as a very well thought through system, wherein the rates are simple… no compliance headaches, and therefore has become very attractive,” Sitharaman said
Sitharaman said there was room for improvement in issuing refunds faster, although the process has been significantly improved in recent years. Asking taxmen to avoid “ham-handed ways” in dealing with taxpayers, the minister said that the action taken should be proportional to the issue at hand.
She also asked taxmen to use enforcement measures only as a last resort, and the goal of the department should be to encourage voluntary compliance.
Sitharaman pointed to the Budget to outline the major objectives – simplification, improved services, tax certainty and lower litigation.
She said that there was a lot of work happening across all focus segments. Within the next six months, at least some parts of the I-T Act will be written in simple and easy to understand language with an internal committee already tasked with the job, she said.
“Improving taxpayers’ experience is something on which I want all of you to pay attention. Like the new tax regime, the same approach should be followed in one-on-one interactions… If the notice also has to showcase the language, it can frighten the assessee. Language should be simpler and devoid of technical words. Can we explore easy, simple to understand notices so that our communication is accessible? Can you also explain the reason behind any action taken and also the reason why the notice has to go in the first place,” FM said.
Sitharaman said that often the language used was such that it raised more questions and required a clarification from the department. The minister’s comments came in the wake of several instances of the income tax department having to resort to issuing explanations for tax proposals or FAQs since they were not easily understood, or the implications of a move were unclear.
The minister also urged authorities to address grievances as a priority.