Government to revamp procedure for tax assessment

India has set the ball rolling for what could completely reset the taxpayer-income tax department relationship.

The government has handed out the task of firming up modalities for faceless income tax assessment and scrutiny to high-level direct taxes panel.

“Terms of reference of the direct tax task force have been expanded,” a senior government official, privy to the development, told ET. It will now look at faceless or anonymised verification, scrutiny and assessment.


The suggestion for jurisdiction-free and faceless assessment and scrutiny had first come from an internal task force of the Central Board of Direct Taxes.

Faceless assessment or scrutiny would simply mean that a taxpayer would not have to interact in person with a tax officer. And, an assessing officer would not know the taxpayer whose records he examines relying extensively on use of technology. The department already carries out faceless processing and issuance of refunds via the processing centre in Bangalore.

Faceless assessment and scrutiny will significantly reduce corruption and also speed up processing.

The Narendra Modi-led NDA government, which had unveiled several taxpayer friendly measures in its previous term, has accorded the move high priority. The task force has been given time till July 31 to submit its report.

The task force will look at a mechanism for system-based verification of financial transactions.

The task force has also been asked to look at ways to cut down compliance burden of taxpayers, reduction in litigation the official said besides sharing of information on various taxes such as goods and services tax, customs and financial intelligence unit.

The task force, convened by Akshilesh Ranjan, member in the CBDT will now have Ritvik Pandey, joint secretary in the department of revenue as member. Former finance minister Arun Jaitley had extended the tenure of the task force by two months in May. Chief Economic Advisor K Subramanian will also be member in the task force. Former CEA Arvind Subramanian was a special permanent invitee to the task force.

Finance ministry had in November, 2017 set up the task force to rewrite the income tax laws to simplify them. It was tasked to frame new legislation keeping in view taxation systems prevalent in various countries, international best practices and country’s economic needs.