Enforcement action should be ‘a last resort’ : Sitharaman to taxmen
- Enforcement measures should only be used as a last resort by tax officers, finance minister Nirmala Sitharaman.
Highlights:
- Finance Minister Nirmala Sitharaman, in her recent address, underscored the importance of judicious use of enforcement measures by tax officers, emphasizing that such actions should be a last resort.
- The minister's remarks were made during an event celebrating the 165th anniversary of income tax in India, where she outlined the need for a more taxpayer-friendly approach in the administration of tax laws.
Judicious Use of Enforcement Powers
- Minister Sitharaman urged tax officers to exercise their authority with caution, stressing that the purpose of their powers is to ensure compliance rather than instill fear among taxpayers.
Simplification of Tax Notices and Communication
- A significant concern raised by the Finance Minister was the complexity and technical nature of the language used in tax notices and correspondence, making the tax process more daunting.
- To address this, Sitharaman called for the issuance of simple, easy-to-understand notices that clearly explain the reasons for their issuance.
Ongoing Income Tax Reforms
- The minister also announced ongoing reforms aimed at simplifying the Income Tax Act. Within six months, portions of the Act will be rewritten in straightforward, easy-to-understand language, aligning with Prime Minister Narendra Modi's vision of a seamless, painless, and faceless taxation system.
Adoption of the New Income Tax Regime
- Minister Sitharaman highlighted the widespread acceptance of the New Tax Regime, introduced in the fiscal year 2020-21. She noted that 72% of all taxpayers have transitioned from the old tax regime to the new one.
Widening the Tax Net and Improving Services
- The Finance Minister also discussed the broadening of the tax base, with approximately 5.86 million income tax returns being received from first-time filers. Additionally, she emphasized the need to enhance the turnaround time for issuing tax refunds, noting that 12.1 million returns have been assessed within 24 hours.
Prelims takeaways:
- Income tax regime