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Tax payers deserve better services says FM Nirmala Sitharaman

Tax payers deserve better services says FM Nirmala Sitharaman
-By Snehi Suryash

Finance Minister Nirmala Sitharaman on Friday said taxpayers deserves better services as they are the nation-builders. Thus, the government would come out with a charter of rights for them.

Sitharaman emphasised that PM addresses taxpayers as ‘nation-builders’ and an honest taxpayer helps build this country. They help government after government to carry forward social welfare programmes which are absolutely critical for the livelihoods of the poorest of the poor.

She also said that PM’s approach to ensure tax compliance is based on trust and respect for the taxpayer. And the schemes will be rolled out accordingly.

The minister also said the govt. has taken several measures towards simplification, improving transparency and moderation in rates. This is a part of efforts to bring in ease for honest taxpayers.

Minister was addressing a centenary celebration programme of jurist Nani Palkhivala, organised by Sastra University. While delivering the 16th Nani Palkhivala lecture virtually, she said that the individual tax officials are not allowed to scrutinize accounts or visit taxpayers at will.

Instead, the faceless assessment process will be based on random selection of tax cases based on certain criteria. The Centre is running a pilot for faceless assessment of tax returns, wherein the assesse is not required to have a physical interface with tax officials, she added.

She stated that the entire approach to the tax framework will be based on respecting honest taxpayer. Sitharaman expressed her happiness to be part of a government being led by a Prime Minister. As he honestly thinks the Indian taxpayer needs to be served better.

She added that the PM has made it very clear that this country has to make tax simple and easy for compliance for taxpayers. To fulfil this objective, the government has introduced faceless assessment, reduction in scrutiny and pre-filled tax form, among others.

FM, Sitharaman also spoke about September 2019, referring it to be a major step to bring down the corporate tax. She added that even then and now too India stands as one of those countries with the lowest of rates. Also, the corporate tax methodology itself has been so simplified, that there are no exemptions, there are no benefits.

Charter of Rights for the taxpayer:

The Budget had earlier announced a taxpayers’ charter of rights. Which is expected to have statutory status & will empower citizens by ensuring time-bound services by the IT Department. FM also said that there are only a few countries in the world, where there is a Charter of Rights for the taxpayer. Countries such as -Australia, the UK and US.

“It clearly states obligation towards the nation as much as clearly pronouncing the rights. We are attempting that. I had announced it as a part of the Atmanirbhar campaign. We are very keen to provide to taxpayers Charter of Rights. We shall be coming with that,” Sitharaman said.

New tax slabs:

Under the new tax proposal, people with an income of up to Rs 2.5lakh won’t have to pay any tax. For income between Rs 2 lakh 50 thousands to 5 lakh, the tax rate (as earlier) is 5 per cent.

Further, those with an income of Rs 5 lakh to Rs 7.5 lakh will have to pay a reduced tax rate of 10 per cent. While, between Rs 7.5 lakh and Rs 10 lakh it is 15 per cent. Between Rs 10 lakh and 12.5 lakh it is 20 per cent. Between Rs 12.5 lakh and 15 lakh it is 25 per cent and above Rs 15 lakh 30 per cent.

The new tax regime shall be optional for the taxpayers. An individual who is currently availing more deductions and exemption under the Income Tax Act may choose to avail them. Or they can continue to pay tax in the old regime.

Observations made on ADR during the session:

Speaking during the virtual session, Tata Sons Chairman N Chandrasekaran said India’s judicial system has a huge capacity issue. As per the National Judicial Data Grid, somewhere around 3 crore cases are pending in one court or another. And in the cases of high courts and Supreme Court, over 45 lakh cases are pending.

He also stated that typically a case takes 4-5 years for resolution. And normally 40 per cent of the total disputed settlement is already spent during this period. But if time is taken into account, along with the value of money, almost 100 per cent is gone. These huge overhead, huge spend, huge inefficiency can be addressed by alternative dispute resolution or ADR.

FM, Sitharaman said that to fasten the corporate dispute resolution process, the government is making an effort to make India an international arbitration hub. This will enable to deal with all those Indian corporate disputes which are going to Singapore or London for resolution. To achieve the goal, Parliament last year passed the Arbitration and Conciliation (Amendment) Bill 2019.

She  said that India will be one of the good arbitration hubs in future. If India’s arbitrations, lawyers with expertise in arbitration and Indian legal system is adequately funded and resourced. This law is part of the government’s efforts to encourage institutional arbitration for settlement of disputes. Which will make India a centre of robust alternative dispute resolution mechanism.