Taxpayers’ Charter — What the Income Tax department expects from you and what it promises in return

• Prime Minister Narendra Modi launched India’s new taxpayers’ charter today.
  
• The charter promises 14 commitments from the Income Tax (IT) department to taxpayers, and six obligations that the taxpayer has towards the government.
  
• Modi said the charter is aimed at fostering an environment of trust, where the IT department can’t look at a case with suspicion without any evidence to back it up.
  

Prime Minister Narendra Modi launched India’s new taxpayer charter today with the hopes that more than just 1.5 crore out of India’s booming population of 130 crore will pay tax. The charter includes 14 regulations that the Income Tax (IT) department has to follow with respect to taxpayers and six obligations that the taxpayer has towards the government.


“The tax department is not allowed to look at tax filings as suspicious without any evidence to support their doubts,” said Modi during the launch stating that that charter will be applicable starting today.

The aim is to make the entire process of taxation, “painless, seamless and faceless,” for the country. “Policy-driven governance will minimise grey areas and reduce the need for discretion,” Modi added. According to him, the charter will bring efficiency, integrity and sensitivity into the government machinery.


The government’s commitment to taxpayers are:

1. To provide fair, courteous and reasonable treatment
   
2. Treat the taxpayer as honest
   
3. To prove a mechanism for appeal and review
   
4. To provide complete and accurate information
   
5. To provide timely decisions
   
6. To collect the correct amount of tax
   
7. To respect the privacy of taxpayers
   
8. To maintain confidentiality
   
9. To hold its authorities accountable
   
10. To enable representative of choice
    
11. To provide a mechanism to lodge a complaint
    
12. To provide a fair and just system
    
13. To publish service standard report periodically
    
14. To reduce the cost of compliance

According to Modi, paying tax and collecting tax is not an issue of rights but an aspect of responsibility. “Even if there is an issue, the taxpayer now has the right to appeal the scrutiny filed by the income tax department,” he said.

Your obligation as a taxpayer to the government are:

1. Be honest and compliant
   
2. Be informed
   
3. Keep accurate records
   
4. Know what your representation does on your behalf
   
5. Respond in time
   
6. Pay in time

“These steps will not only enhance transparency but also move further in a predictable tax regime,” said Kedar Patki, the CFO of IndiaFirst Life Insurance. According to Modi, the charter is a step towards making the taxation process seamless. That is, the tax administration should not confuse the taxpayer but should instead focus on solving cases in the most straightforward way possible.

India’s new tax charter also brings along a new reform, the ‘faceless’ assessment, and appeal. This means that the identity of the taxpayer and the tax officer should have no bearing on the outcome of an income tax case.

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