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News Direct Tax-Income Tax

  • Oct 26, 2020
  • Centre extends the deadline to file tax returns to Dec 31

    In a relief to taxpayers, the government on Saturday further extended the deadline for filing returns by individual taxpayers for financial year 2019-20 by a month till December 31.

    Also, the due date of furnishing Income Tax Returns (ITRs) for taxpayers whose accounts require to be audited has been extended till January 31, 2021.

    The government had earlier in May extended various due dates for filing ITRs for FY 2019-20 from July 31 to November 30, to give compliance relief to taxpayers due to the Covid-19 pandemic.

    In a statement, the Central Board of Direct Taxes (CBDT) said, “The due date for furnishing of Income Tax Returns for the other taxpayers [for whom the due date (i.e. before the extension by the said notification) as per the Act was July 31, 2020] has been extended to December 31, 2020.”

    The due date for furnishing of ITRS for “the taxpayers (including their partners) who are required to get their accounts audited [for whom the due date as per the I-T Act is October 31, 2020] has been extended to January 31, 2021”, it added.

    Also the due date for furnishing of ITRs for the taxpayers who are required to furnish report in respect of international/specified domestic transactions has been extended to January 31, 2021.

    “The date for furnishing of various audit reports under the Act, including tax audit report and report in respect of international/specified domestic transaction, has been extended to December 31, 2020,” the CBDT said.

    Further, in a relief to small and middle-class taxpayers in the matter of payment of self-assessment tax, the due dates for payment have been extended.

    The CBDT said in view of the “constraints being faced by taxpayers due to Covid-19”, the deadlines have been extended to “provide more time to taxpayers for furnishing of Income Tax Returns”.

  • Oct 23, 2020
  • Form 3CD: Income Tax Department releases New Tax Audit utility, Schema Version 1.21

    The Income Tax Department notifies ‘Form 3CD Schema Changes’ under e-Filing Project released New Tax Audit utility, Schema Version 1.21. Form 3CD consists of the statement of particulars required to be furnished under section 44AB of the Income-tax Act, 1961. The department released the document which tracked various the changes done in Form 3CD Schema post first release.

    The Schema changes as on 22nd October, 2020 on Part A wherein new section code was added namely Clause 8a; Clause 18(ca); Clause 18(cb).

    Form No. 3CD and 3CEB have been modified to accommodate the newly added provisions of 115BA, 115BAA, 115BAB, 115BAC and 115BAD. In form 3CD clauses have been added to provide information regarding the exercising of the option by the assessee and provide further adjustments in WDV if the same is exercised and in transfer pricing form new clause have been added to provide for the specified domestic transactions entered into by the assessee with the persons who have availed the option under section 115BAB which has resulted in more than ordinary profits expected to arise in such business.

  • Oct 21, 2020
  • Dividend taxation puts India in quandary; is it justified to impose additional tax on dividends?

    India’s dividend taxation policy has witnessed many changes over the years, guided by varied policy objectives and administrative convenience. India introduced a very unique way to tax dividends by levying Dividend Distribution Tax (DDT) on the companies declaring dividends rather than shareholders, way back in 1997 (leaving one intervening year). We have now from April 2020 reverted to the classical regime of taxing dividends in the hands of shareholders and it is a sweet coincidence that the first major and direct ruling on DDT is out just when we reverted to this classical system.

    While some sporadic litigation was going on at various levels, it was always perceived that a tax treaty may not be relied upon for reducing the rate of DDT, and accordingly, no treaty benefit was to be given for dividends paid to foreign companies/non-residents.

    However, in a path-breaking, landmark ruling pronounced last week, Delhi ITAT in the case of Giesecke & Devrient [India] Pvt Ltd. held that beneficial rate of tax on dividend under DTAA shall prevail over DDT rate under the domestic law. The ruling traces the historical journey of DDT up to the Finance Act, 2020, concludes that it was a tax on shareholders, the levy of which was shifted upon dividend-paying companies for administrative convenience.

  • Oct 21, 2020
  • ITAT: Indirect transfer of Indian assets will not attract LTCG tax

    The Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that indirect transfer of Indian assets will not face long-term capital gains tax.

    The ruling was in the context of the sale of Singapore-based Accelyst Pte Ltd (Freecharge) by Singapore startup incubator Augustus Capital PTE Ltd to Snapdeal’s holding company Jasper Infotech Pvt Ltd (JIPL) in FY16.

    The decision comes as a relief to foreign funds and entities being subjected to tax demands for earlier years, according to experts.

    The crux of the issue lies in the addition of Rs 36.3 crore as long-term capital gains (LTCG) by the assessing officer (AO) against a claim of nil income by Augustus Capital, stating that the transaction was not taxable in India.

    As per an amendment to Section 9 of the IT Act in 2012, if any share or interest in a foreign entity derives its value substantially from the assets located in India, then such share or interest is deemed to be situated in India and any income arising from transfer of such share or interest is deemed to arise in India.

    Explanation 6, which was later added to the Finance Act, clarified that the word ‘substantially’ meant the fair market value (FMV) of assets located in India exceed Rs 10 crore and the FMV of assets located in India represent at least 50% of the FMV of total assets of the foreign entity.

  • Oct 21, 2020
  • Income Tax survey to be conducted only after nod from high-ranked officers, says CBDT

    Income tax surveys to collect information for scrutiny assessment will be undertaken by the tax deducted at source (TDS) directorate only after approval from principal chief commissioner or chief commissioner level officer, the Central Board of Direct Taxes (CBDT) has said. The CBDT has issued directions to the officers that where any survey action is required by officers of "Central Charge" (involving search/ seizure), international charge, NeAC (National e-Assessment Centre)/ NFAC (National Faceless Assessment Centre), the same shall have to be first approved by a collegium comprising high-ranked officers.

    Pursuant to 'The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020', the apex direct tax body CBDT has issued an internal order on exercising the power of survey by tax officers under Section 133A of the I-T Act.

    In an I-T survey, tax officers visit business premises of the taxpayer to gather information by way of examination of books of accounts, data stored electronically and also access e-mail communication.

    "Any verification or survey u/s 1A of the Act by the TDS charge shall be conducted by its own officers.

    "Where the TDS charge is headed by the Pr. CCIT (Principal Chief Commissioner of Income Tax) of the region or by the CCIT (TDS), the verification or survey action shall be conducted by the officers of the TDS charge," the CBDT said.

  • Oct 20, 2020
  • CBDT reiterates tolerance range under transfer pricing rules

    The Central Board of Direct Taxes (CBDT) on Monday reiterated tolerance range of 1-3% under transfer pricing rules for the current financial year even though experts said it was expected that the tax department would provide concession given the Covid-19 pandemic.

    India’s transfer pricing rules, which apply to the transaction among subsidiaries of multinational companies, set an acceptable tolerance range for the variation between arm’s length price and the transaction price, failing which the department adjusts the pricing leading to tax implication.

    CBDT kept tolerance range of 1% for wholesale trading and 3% for all other transactions undertaken during the financial year ending March 31, 2020.

    According to the notification, the transaction considered ‘wholesale trading’ would be those where the purchase cost of finished goods is at least 80% of the total cost of such trades. Further, the average monthly closing inventory of such goods must be 10% or less of sales on such trading activities.

    “The tolerance range as laid down appears to be a mechanical follow-through of the last year notification, without appreciating the business and commercial realities in Covid-19 times,” Amit Agarwal, partner at Nangia & Co LLP said.

  • Oct 19, 2020
  • Transparent taxation: Withdraw untenable tax litigation

    Prime Minister Narendra Modi launched the platform ‘Transparent Taxation—Honouring the Honest’ on August 13, 2020, comprising of faceless assessments, faceless appeals and a taxpayer’s charter. Faceless assessment and appeals aim to eliminate physical interface between taxpayers and tax authorities, thereby hopefully bringing in greater efficiency and transparency to the assessment and appeal process. This is a significant reform in the tax administration process, reducing tax officer’s discretion, tax terrorism, and scope for corruption and litigation.

    It is well known that the Income Tax Department (ITD) is amongst the largest litigants in India. The Receipt Budget 2020-21 indicates that the amount of taxes on income which is under dispute was Rs 8 lakh crore at the end of 2018-19. This is 5.8 times the tax amount not under dispute (Rs 1.38 lakh crore)! About 60% of outstanding disputes have come up in 2017-18 and 2018-19, both in the NDA regime. Of this, the corporation tax amount under dispute at the end of 2018-19 was Rs 4.06 lakh crore—4.9 times the corporation tax amount not under dispute (Rs 0.83 lakh crore). This ratio was lower at 3.7 times at the end of 2013-14.

  • Oct 19, 2020
  • Bank NPAs weaken monetary policy transmission, lower loan growth rate, says RBI paper

    The presence of non-performing assets (NPAs) in banks hinder monetary policy transmission and affects bank lending growth, according to a working paper released by RBI officials titled Bank Capital and Monetary Policy Transmission in India. “Presence of non-performing assets in a bank also weakens monetary policy transmission and lowers the loan growth rate,” the paper said stressing that the views expressed in it are those of authors and not of RBI. Authored by Silu Muduli and Harendra Behera of the Department of Economic and Policy Research (DEPR) at RBI, the paper also underscored the need for capital injection by the government into public sector banks that may increase the credit flow to the real sector along with the smoothening transmission of monetary policy.

    According to study findings, there is a positive association between bank equity and credit growth that “calls for the need for a countercyclical capital buffer for the banks to protect their balance sheet against losses from changes in economic conditions during the recessionary phase.” Also, banks with higher Capital to Risk (Weighted) Assets Ratio (CRAR) see a lower cost of funds. Hence, a higher CRAR “unlocks the bank lending channel and helps in smooth transmission of monetary policy,” the paper noted.

  • Oct 17, 2020
  • Income tax: Faceless Appeals Scheme challenged in Delhi High Court

    A petition has been filed in Delhi HC seeking a direction to government to grant an opportunity of hearing to all taxpayers/assessees under the Faceless Appeals Scheme 2020. The petitioner has challenged the discretionary power of the Chief Commissioner or the Director General of Income Tax in granting chance of hearing to assessee. In the matter Delhi HC has issued notice to the Income-Tax department and reply has been sought in four weeks. Matter to be heard on December 15.

    Counsel for the petitioner stated that in terms of the new Faceless Appeal Scheme, 2020, the right of being heard, even through the videoconferencing mode shall be subject to the approval of the Chief Commissioner or the Director General and therefore, the same is discretionary, i.e. he "may' or "may not" provide a right of personal hearing in the matter. That’s why scheme be termed discriminatory, arbitrary and illegal to the extent it provides a virtual hearing as per the circumstances to be approved by the administrative authorities under the Income Tax Act, 1961.

    Petitioner further submitted that the right to provide or not to provide a hearing in the matter is also against the principle of audi alteram partem i.e. no person should be judged without a fair hearing in which each party is given an opportunity to respond to the evidence against them. Petitioner also mentioned that the Faceless Appeal Scheme is contrary to sections 250(1), 250(2) and 250(5) of the Act, which specifically state that right of hearing shall be granted to an assessee at the appeal stage.

  • Oct 17, 2020
  • CBDT clamps down on coercive assessment, tax recovery measures by officers

    The Central Board of Direct Taxes (CBDT) has restricted the coercive and intrusive powers of assessing and tax recovery officers with immediate effect.

    In its circular, the board asked the officers to take coercive and intrusive measures only after exhaustion of other means of recovery.


    It said recovery surveys be resorted to only in cases where tax assessees are not responding to notices or notices are not being served.

    The board reminded the officers that the survey can only be undertaken by those in the investigation or TDS wing of the income tax department.

    It said the recovery be approved by higher officers, depending on the nature of the taxes.

    It also directed officers to take prior approval of senior officers such as principal commissioners, commissioners for attachment of movable or immovable property.

    Sandeep Sehgal, director at AKM Global, a consulting firm, said,"It is often seen that in the zeal of collecting taxes, the tax officers are quick to resort to such means without looking into other suitable alternatives. The circular clearly instructs them to avoid doing that."

  • Oct 17, 2020
  • UN proposes digital tax at 3-4% on gross basis, provides net-basis option

    The United Nations (UN) has released the revised draft of its proposal for taxation of a digitised economy and has invited comments. It contains two options. Under the gross basis of taxation, the UN drafting committee has recommended a withholding rate of 3% or 4%, the final rate is to be decided by the countries.
    An option is made available to multinational enterprises (MNEs) for being subject to tax on a net basis. Here the taxable profits would be computed by determining the global profit rate of a MNEs in-scope activities, applying it to the company’s local sales revenue and attributing 30% of that to the market jurisdiction, where the customer base lies.
    A few days ago, the Organisation for Economic Co-operation and Development (Oecd) had released the approved blueprints of Pillar One - dealing with digital tax and Pillar Two - dealing with introduction of a minimum corporate tax rate.

    India was the first country to introduce a tax on the digital economy by the Finance Act, 2016. An equalisation levy at 6% was introduced on certain advertising and related services earned by non-resident entities. Its scope was expanded by the Finance Act, 2020 to cover non-resident e-commerce operators.

  • Oct 14, 2020
  • Global tax war ahead: After no consensus in OECD; Facebook, Google, Amazon, LinkedIn could face domestic taxes

    Google, Facebook, Amazon, LinkedIn and Netflix could face larger domestic tax liability after OECD (Organisation for Economic Co-operation and Development) postponed a common tax framework for global economies, a move that will allow countries like India to go ahead with their own plans to tax the digital giants.

    OECD was expected to come out with a common tax framework by December this year, now it's expected to do so mid-next year.

    This could mean that most countries including India would implement their own plans rather than wait for OECD’s framework on how to tax digital giants.

    India has already started partly taxing these global giants under equalisation levy and has also introduced significant economic presence (SEP) framework last year.

    Global digital giants including Google, Facebook, Amazon, LinkedIn and Netflix could face larger domestic tax liability as OECD’s international collaboration that had hoped to create a consensus on how to tax these companies by December, now postponed it to mid-next year.

    “India was only waiting for the OECD to give some guidance around how economies must tax these global giants. Now that no consensus seems to be emerging, most large economies would go ahead with their own domestic taxes and regulations,” said a person close to the government.

  • Oct 13, 2020
  • Will the government challenge Vodafone tax arbitration verdict? Delhi HC wants answer by November 7

    The Delhi High Court wants the Narendra Modi government to disclose whether or not it intends to challenge the international arbitration award favouring Vodafone in the Rs 40,000-crore retro tax tussle, whose origins can be traced back to 2007.


    In a recent order, which Moneycontrol has reviewed, a division bench of the Delhi High Court said the government’s legal officers should get “categorical instructions” on the issue by November 17, 2020, the next date of hearing.

    “It is deemed apposite that the ASG, for the next date obtains categorical instructions on the aforesaid aspect,” the order said. The ASG is the Assistant Solicitor General, a senior law officer of the government.

    The government’s stance in this high-profile tax spat is crucial considering the controversial move by the Indian Parliament to retrospectively change its tax laws in 2012. The decision nullified Vodafone’s earlier victory at the Supreme Court and was criticised by global investors and MNCs batting for tax certainty.
    Since the Modi regime took over in 2014, there has been no reversal of the retro tax laws, but it has repeatedly assured stakeholders that there will be no repeat of the unpopular step.
    The Centre’s decision may also have ramifications on its approach in other, related international arbitration cases involving British oil energy explorer Cairn Energy Plc and mining major Vedanta Resources Plc, both of which have also been hit by the 2012 retro tax laws.

  • Oct 13, 2020
  • Collapse of global tax talks could cost $100 bln, OECD says

    The global economy could shed more than 1% of output if international talks to rewrite cross-border tax rules break down and trigger a trade war, the OECD said on Monday, after countries agreed to keep up negotiating to mid-2021.

    Nearly 140 countries agreed on Friday to extend talks after the pandemic outbreak and U.S. hesitation before the presidential election squashed hopes of reaching a deal this year.

    Public pressure is growing on big, profitable multinationals to pay their share under international tax rules after the COVID-19 pandemic strained national budgets, the countries said in an agreed statement.

    The aim is to update international tax rules for the age of digital commerce, in particular to discourage big Internet companies like Google, Facebook and Amazon from booking profits in low-tax countries like Ireland regardless where their customers are.

    In the absence of a new international rulebook, a growing number of governments are planning their own digital services taxes, which has prompted threats of trade retaliation from the Trump administration.

    "In the 'worst-case' scenario, these disputes could reduce global GDP by more than 1%," the OECD, which has been steering the global tax talks, estimated in an impact assessment.

  • Oct 01, 2020
  • CBDT: Payment gateways won’t have to pay tax on e-commerce transactions under this scenario

    Issuing guidelines for Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) on e-commerce transactions, the Central Board of Direct Taxes (CBDT) said that the payment gateway won’t have to deduct tax under section 194-O of the Income Tax Act on a transaction if it has been deducted by the e-commerce company. For example, according to CBDT’s circular issued on Tuesday, if a consumer buys goods worth X amount from an e-commerce company and pays through a payment gateway, since e-commerce payments are generally routed via such gateways, the liability currently under sector 194-O of the Act to deduct tax may fall on both the e-commerce company and the payment gateway.
    However, with the clarification by the board, if the tax has been deducted by the e-commerce firm, then the payment gateway won’t have to do so. For this, the e-commerce company can also get an undertaking from the gateway for the tax deduction. The clarification was among the guidelines issued by CBDT on the applicability of 1 per cent TDS by e-commerce operators on sale of any goods and services from October 1, 2020, as per the 194-O section inserted into the Finance Act, 2020. The exemption, however, has been given to “certain individuals or Hindu Undivided Family fulfilling specified conditions”.

    “A TDS on e-commerce transactions should not have a negative impact on bottom lines, as the TDS just serves as a red-flag to tax authorities to look out for future tax incomes. And overpayments, if any, are always adjustable.

  • Oct 01, 2020
  • Income Tax refunds issued: Taxpayers get more than Rs 1 lakh crore in first half of this fiscal

    The Income Tax Department today said that it has issued refunds of over Rs 1.18 lakh crore to more than 33.54 lakh taxpayers between 1 April 2020 and 29 September 2020. Income tax refunds of Rs 32,230 crore have been issued in 31.75 lakh cases and corporate tax refunds of Rs 86,094 crore have been issued in 1.78 lakh cases. The department has expedited the process of income tax returns after Finance Minister Nirmala Sitharaman announced faster tax refunds as a relief measure under the Atmanirbhar Bharat package earlier this year.
    However, being asked on how the government can consider the income tax refunds as part of economic relief package when it is the people’s money, FM Sitharaman had said that she accepts that it is people’s hard-earned money but the government is disbursing the refunds at a comparatively much faster rate to provide more cash in the hands of people.

    The income tax department had refunded Rs 62,361 crore to more than 20 lakh taxpayers amid the lockdown after Finance Minister Nirmala Sitharaman had assured to release all pending income tax refunds immediately. The I-T department had issued tax refunds at a speed of 76 cases per minute from April 8 to June 30, 2020, according to the Ministry of Finance.
    CBDT issued the refunds electronically and directly deposited the refunds into the bank accounts of the taxpayers, the ministry had apprised. The department had further urged the filers to provide an immediate response to emails of the department so that refunds in their cases too could be processed and issued right away.

  • Sep 30, 2020
  • CBDT issues guidelines for TDS/TCS on e-commerce transactions from Oct 1

    The Central Board of Direct Taxes (CBDT) on Tuesday issued guidelines for applicability of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) for e-commerce transactions effective October 1. The levies will be applicable on sales of goods exceeding Rs 50 lakh, with exemption to an individual and HUF who receives less than Rs 5 lakh and furnishes PAN/Aadhaar. The TDS is proposed to be levied on e-commerce transactions at 1 per cent in PAN/Aadhaar cases.
    The proposed TDS/TCS will not be applicable for transactions in securities and commodities which are traded through recognised stock exchanges or cleared and settled by the recognised clearing corporation, including recognised stock exchanges or recognised clearing corporations located in the International Financial Service Centre as well as transactions in electricity, renewable energy certificates and energy saving certificates traded via power exchanges, CBDT said.

    A payment gateway will not be required to deduct tax on a transaction, if the tax has been deducted by the e-commerce operator. For an insurance agent or insurance aggregator, the CBDT said if the insurance agent or insurance aggregator has no involvement in transactions between insurance company and the buyer of insurance policy after the first year of policy, he would not be liable to deduct tax for subsequent years but the insurance company will be required to deduct tax on commission payment, if any, made to the insurance agent or insurance aggregator for those subsequent years. TCS will be applicable on sale of motor vehicles from October 1 for value less than Rs 10 lakh for sales to consumers.
    Tax experts said some more clarity is required on issues such as applicability of TCS provisions on deemed exports to SEZ units. “The circular clarifies on several puzzling aspects such as no adjustment for sales return, discount or GST component and applicability on receipts post October 1, even if sales was made before that period.

  • Sep 30, 2020
  • Many companies not fully ready for new Tax Collected at Source regime: EY-SAP India Survey

    A large segment of companies in India is not entirely prepared to deal with various tax implications of the Tax Collected at Source (TCS) provisions that come into effect from October 1, 2020, an EY-SAP India Survey said on Tuesday. The survey conducted earlier this month includes responses of over 110 corporate businesses across India to assess their readiness to implement TCS with respect to compliances, validations, and reconciliation with various reporting requirements.

    "About 85 per cent respondents acknowledged that their current tax function framework is not completely geared up to comply with the new TCS regime. Our conversations with many business leaders also pointed in that direction," EY India Digital Tax Leader Rahul Patni said.

    He added that 80 per cent of the organisations surveyed anticipate issues around applicability and updating systems and processes as a significant challenge to comply with the new TCS regime.

    Also, 81 per cent recognised that reconciling data and ensuring accuracy due to TCS compliances will increase manual intervention for their tax teams.

    "Given the intent of TCS provisions, leading organisations are looking for digital solutions which help to not just comply, but also proactively perform reconciliation from a tax audit readiness and internal audit perspective," Patni said.

    SAP India Vice President, Platforms and Technologies, Anand Raisinghani said with an increasing thrust from the Government to focus on leveraging technology to ensure tax compliances and undertake tax risk assessments, the tax and finance function of organisations need to adopt technology faster than ever.

  • Sep 28, 2020
  • Scrip-wise reporting in ITR must only for LTCG exemption, not for day-trading, short-term gains: CBDT

    The Central Board of Direct Taxes has clarified that there is no requirement for scrip wise reporting for day trading and short-term sale or purchase of listed shares in the filing of income tax return (ITR) in assessment year (AY) 2020-21. The ministry, in a statement on Saturday, said that the gain from share trading in case of stock traders or day traders is generally categorised as short-term capital gains or business income. “This is because their holding period of shares/units in most of the cases is less than one year which is a prerequisite for the gains to be categorised as long-term capital gains.”
    The clarification came following certain media reports around “stock traders/day traders are required to furnish scrip wise details in the return of income for AY 2020-21,” the ministry added. The scrip wise details are needed while filing ITR for AY 2020-21 for reporting long-term capital gains (LTCG) for listed shares or specified units eligible for the benefit of grandfathering. The Finance Act, 2018 exempted gains made on the listed shares/specified units up to January 31, 2018, by introducing grandfathering mechanism for computation of LTCG for these shares.

    The ministry added that since the grandfathering is allowed by comparing different values inlcuding cost, sale price and market price as on January 31, 2018, for each shares/units, the scrip wise details for computing LTCG of these shares/units are required. “Without this reporting requirement, there may be situations where a taxpayer may not claim or wrongly claim the benefit of grandfathering due to lack of understanding of the provisions,” the statement added.

  • Sep 28, 2020
  • Income Tax appeals to be finalised in a faceless manner: Know the online process for taxpayers

    The Income Tax Department has launched the mechanism of Faceless Income Tax Appeals. Under Faceless Appeals, all Income Tax appeals will be finalised in a faceless manner under the faceless ecosystem with the exception of appeals relating to serious frauds, major tax evasion, sensitive & search matters, International tax and Black Money Act.
    The PM on 13th August 2020 while launching the Faceless Assessment and Taxpayers’ Charter as part of “Transparent Taxation – Honoring the Honest” platform, had announced the launching of Faceless Appeals on 25th September 2020.

    Under the Faceless Appeals, from now on, in income tax appeals, everything from e-allocation of appeal, e-communication of notice/ questionnaire, e-verification/e-enquiry to e-hearing and finally e-communication of the appellate order, the entire process of appeals will be online, dispensing with the need for any physical interface between the appellant and the Department. There will be no physical interface between the taxpayers or their counsel/s and the Income Tax Department.

    The taxpayers can make submissions from the comfort of their home and save their time and resources.
    “This scheme is another significant step by the Income Tax department to almost end the personal interaction between Taxpayers and tax authorities. The scheme is intended to eliminate personal bias and decide the appeals on objective evaluation and merits of the case. While the intent of the Government is undoubtedly very good in this entire initiative, implementation alongwith necessary training of the officers handling these matters will be the most important factor for success of the scheme. A lot will also depend on quality and clarity of written submissions/ details filed by taxpayers and if those are badly prepared, then chances of success in these faceless proceedings reduce substantially for the taxpayers,” says Rakesh Nangia, Chairman, Nangia Andersen India.

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