FM Urges I-T Dept To Send Tax Notices in Simple Language, Use Enforcement as Last Step

Moneylife Digital Team 22 August 2024

Economy & Nation

Urging the income-tax (I-T) department to be fair and friendly and ensure that there is an improved taxpayer experience, Union finance minister (FM) Nirmala Sitharaman says the tax notices should be temperate, simple and easy to understand for the taxpayer.

Underlining the judicious use of power to ensure compliance and not to create fear among the taxpayers, Ms Sitharaman emphasised the speedy issue of refunds and following due process to encourage voluntary compliance. She was speaking at the 165th anniversary of I-T Day, observed by the central board of direct taxes (CBDT) in New Delhi.

"Taxpayers must not be subject to unnecessary harassment," she says, adding that tax authorities should mention the reason for sending tax notice and present their side of the story in a 'crystal clear' way.

At the same time, she emphasised capacity building, especially in terms of adopting global best practices in tax administration.

Underlining the growing trust of taxpayers towards the I-T department, the Union finance minister further expressed her heartfelt gratitude to the honest taxpayers for their contribution in delivering on welfare and development. She appreciated the fact that there are 5.85mn (million) first-time income tax return (ITR) filers for assessment year (AY)24-25. "It showcased that India was getting more formalised as an economy and more people are coming forward to voluntarily pay taxes," she says.

Observing that, over the years, the focus of the tax department has been on enhancing taxpayer services and leveraging technology to ease compliances, Ravi Agrawal, chairman of CBDT, gave an overview of some of the achievements in the previous fiscal year. It includes a growth of 17.7% achieved in net collections and an increase of 7.5% in the number of ITRs filed over the previous year till 31 July 2024.

He further mentioned that 72% of the returns were filed under the new tax regime, highlighting its widespread acceptance.

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