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What is faceless tax assessment scheme? Key takeaways of income tax reform

What is faceless tax assessment scheme? Key takeaways of income tax reform

By Snehi Suryash

Prime Minister Narendra Modi today launched a “Transparent Taxation — Honouring the Honest” platform that provides faceless assessment and appeal and taxpayers’ charter.

While unveiling the faceless tax scrutiny, he urged people to pay their due taxes and contribute to nation building. He appealed to those not paying taxes despite the capability to come forward and commit themselves to the cause of making the country self-reliant.

Modi said that the latest tax reforms by his government are efforts to make tax system seamless, painless and faceless.

The Indian prime minister said that the faceless assessment and taxpayer charter will come into place from today itself. The faceless appeal is going to be applicable from September 25 2020.

Features and Expectations:

The PM Narendra Modi also unveiled next phase of direct tax reforms aimed at easing compliances. Also, rewarding honest taxpayers as the government looks to rebuild the pandemic-hit economy.

Deduction and Collection:

PM Modi stated that earlier the focus was on banking the unbanked, securing the unsecured, funding the unfunded. But in present situation the government is launching Honouring the Honest.

Addressing via video conference , Narendra Modi said that the ongoing structural reforms has reached new heights today. Transparent Taxation – Honoring the honest will have face less assessments, appeal and taxpayer charter.

Expansion of Scope:

PM Modi stated that every law and policy has been turned from power centric into People Centric and Public Friendly. This is the use of the new governance model of the new India.

PM states that earlier decisions were taken in desperation or under pressure, and they were called reforms. Reform made today are reform is policy based, not piecemeal. Holistic reform becomes basis of another reform, making way for new reforms.

Faceless Assessment of tax

Faceless Assessment is being rolled out to remove human interface between taxpayer and the Income Tax (I-T) Department.

Finance Minister Nirmala Sitharaman said that the this reform would eases compliance burden, bring in fair objective and  just system.  It would help in easing compliance burden of taxpayers and increase fairness and objectivity in the tax system. There shalln’t be any physical interface between the department and taxpayer. So as to bring in the certainty of information.

Faceless appeals

Under the system, appeals will be randomly allotted to any officer in the country.

“These teams will be chosen randomly and can come from any city,” the prime minister said on Thursday. “Till now, all tax-related matters in a city are dealt with by the IT department of that city. Now with the help of technology , scrutiny will be done by a randomly chosen Income Tax officer anywhere in the country,” the PM added.

Under the system, the taxpayer will not be required to visit the income tax office or the officer. And the appellate decision will be team-based and reviewed.

Features of the Faceless Assessment Scheme:

  • Selection of a tax payer only through system using data analytics and AI
  • Abolition of territorial jurisdiction
  • Automated random allocation of cases
  • Central issuance of notices with Document Identification No. (DIN)
  • No physical interface, no need to visit the income tax office
  • Team-based assessments and team-based review
  • Draft assessment order in one city, review in another city and finalisation in third city.


Cases relating to:

  • Serious frauds, major tax evasion, sensitive & search matters
  • International tax
  • Black Money Act and Benami Property