THE GIST of Editorial for UPSC Exams : 08 october 2019 (Faceless Scrutiny (The Hindu))

Faceless Scrutiny (The Hindu)

Mains Paper 3: Economy
Prelims level: Faceless Scrutiny
Mains level: Pros and cons with the new Faceless Scrutiny system

Context

• The new electronic assessment scheme for faceless scrutiny is being touted by the Government as a landmark move to improve ‘ease of compliance’ for India’s harried income tax payers.

Pros and cons with the new system

Pros

• It may save taxpayers the hardship involved in presenting themselves at the Income Tax office at the whims and fancies of an assessing officer, faceless scrutiny as it stands now is unlikely to vastly simplify life for the taxpayer.
• The scheme seeks to do away with the discretionary selection of IT returns for scrutiny and obviate demands for bribes that accompany personal hearings, by relying on a team-based selection of returns and dynamic jurisdiction.

Cons

• But small tax-payers may 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.
• Given the complex tax laws, it will take a lot of toing and froing and uploading of voluminous documents, before a taxpayer can convince the assessing unit of his tax claims.
• There are also enough exceptions built into the new rules that offer ample scope for a determined assessing officer to side-line the ‘faceless’ process.

Way forward

• In truth, it is the IT departments habit of peppering small compliant taxpayers with demand notices for measly sums, based on half-baked analysis of data, that presents the biggest hindrance to ease of compliance.
• It isn’t re-assuring that four lakh taxpayers have already been picked up for scrutiny this year.
• Completely doing away with scrutiny assessments for more compliant sets of taxpayers such as the salaried, and setting a minimum bar on the value of transactions that can be scrutinised, are better ways to end the harassment.

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Prelims Questions:

Q.1) With reference to the ‘Ration in Kind for the Defence Officers’, consider the following statements:
1. Recently Government of India has announced the restoration of the ration in kind for the officers of the three Armed Forces posted in peace areas.
2. Now all officers of the Armed Forces and central paramilitary forces including those in peace stations will be getting ‘Ration in Kind’.

Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. None

Answer: A
Mains Questions:
Q.1) What are pros and cons with newly faceless Scrutiny tax sytem?