Curing the Fear of Paying Taxes

Context: The new ‘faceless’ Taxation system is aimed towards respecting the honest taxpayer and against the tax evader.

Benefits of New ‘Faceless’ Income Tax(I-T) Regime:

• Anonymity:  Faceless and computerized assessment creates a dynamic sphere of control where one won’t have to visit the office nor know the tax-assessing officer.
• Move towards Transactional Trust: where the data of one’s financial transactions are routinely collected by the tax department from other regulatory bodies.
• Increased Compliance rate: Taxpayer knows that his/her transactions are leaving behind a footprint which can be tracked by anonymous tax officials who cannot ignore them,
  • For E.g. Broadening of the scope of Annual information statement (AIS) under form 26AS which shows the purchase of mutual funds of more than ?10 lakh in a year, or annual aggregate payment of more than ?10 lakh by cheque or ?1 lakh by cash against credit cards.
• Removes the social dilemma: revolving around payment or evasion of taxes: by tilting the balance in favour of payment and against evasion, by respecting the honest taxpayer, not lauding the tax evader.

Conclusion: To succeed in the aimed task of making taxation system effective and efficient, it will need sustained collaborative efforts by all the stakeholders.