Evaluate the efficacy of the newly launched electronic assessment scheme in easing the process of tax filing?

The government has launched a new electronic assessment scheme for faceless scrutiny. It is seen as a landmark move to improve the ease of compliance for India’s harried income taxpayers.

About the scheme

• The scheme eliminates human interface between the taxpayer and the income tax department
• The scheme aims to facilitate faceless assessment of income tax returns through completely electronic communication under which taxpayers will receive notices on their registered e-mails as well as on registered accounts on the web portal www.incometaxindiaefiling.gov.in with real-time alert by way of SMS on their registered mobile number, specifying the issues for which their cases have been selected for scrutiny.
• The replies to the notices can be easily prepared by the taxpayers at their own residence or office and be sent by email to the National e-Assessment Centre by uploading the same on the designated web portal.

How the electronic assessment scheme will aid in increasing the ease of compliance?

• The electronic assessment scheme will save taxpayers the hardship involved in presenting themselves at the Income Tax office at the whims and fancies of an assessing officer.
• The scheme does away from the discretionary selection of IT returns for scrutiny and obviates demands for bribes that accompany personal hearings by relying on a team-based selection of returns and dynamic jurisdiction.
• The faceless assessment is expected to increase ease of compliance for taxpayers as the cost and anxiety of taxpayers are likely to be greatly reduced.

Not a Breakthrough

The small tax-payers are still come up against three problems with the new system:

• With low levels of digital connectivity and awareness in India’s hinterland, requiring taxpayers to respond within 15 days to demand notices through the e-filing system is an uphill tall ask.
• Owing to the complex tax laws, it would still require a lot of toing and froing and uploading of voluminous documents, before a taxpayer can convince the assessing unit of his tax claims.
• The new scheme has exceptions built into the new rules that offer ample scope for a determined assessing officer to side-line the ‘faceless’ process.

The faceless scrutiny as it stands now is unlikely to vastly simplify life for the taxpayer.