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How technology is changing personal tax landscape in India

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Evolving tax landscape demands increased transparency, digitizationThe focus of tax authorities has been in expanding the taxpayer base and at the same time, streamlining and simplifying the tax provisions.

How technology is changing personal tax landscape in India
Evolving tax landscape demands increased transparency, digitization
The focus of tax authorities has been in expanding the taxpayer base and at the same time, streamlining and simplifying the tax provisions. Leveraging on technology seems to be the obvious solution.
The Indian tax department has indeed been at the forefront in terms of enhanced use of technology. This has helped taxpayers apply for tax registrations online, enabled e-payment of taxes, e-filing and e-processing of tax returns and refunds by authorities, etc. The faceless e-assessment and e-appeals introduced, facilitates completion of tax assessments and appeals electronically without visiting the tax office.
With the objective of enhancing transparency and capturing broad-based information, mandatory quoting of PAN for specified transactions, linking of PAN and Aadhaar, online filing of tax returns, etc. have been introduced. The power of digital has been channeled effectively to interact with the taxpayers, facilitate taxpayer compliance, ease the burden on tax administration and has also aided in information sharing between/with tax authorities. This has helped authorities move towards “Limited assessments” where the queries during the assessment proceedings are focused on specific and identified areas.
The new Income tax portal
The new Income Tax portal was launched on June 7, 2021. The new e-filing portal is aimed at providing convenience and seamless experience to taxpayers.
The new e-filing portal 2.0 (incometax.gov.in) has introduced and enhanced many features to widen the information available in the website, provides an informative taxpayer-dashboard, enables interactive response to queries, and help with a more comfortable e-filing experience. The portal also enables payment of taxes free and interactive income tax return preparation software, step-by-step instruction on filing the tax return, linking of PAN and Aadhaar, opportunity to change specific details relating to both, online requests for rectification via the website, grievance filing etc. Keeping aside the technical glitches during the transition phase, the portal has indeed expanded facilities available with respect to tax return filing and related services.
Changing scenario of income tax due to implementation of e-filing
The introduction of e-filing has enhanced the convenience, accuracy, speed of processing of returns and provides immediate confirmation/acknowledgment on the return filing. A whole host of value added services such as providing a view of taxes paid/taxes withheld/refunds received via the Form 26AS, tracking of refunds, SMS alerts regarding status of processing and refunds etc., automated reminders for tax payments and tax filings etc., have significantly helped taxpayers move towards easier compliances.
The taxpayers are also provided the opportunity to revise their tax returns to rectify their mistakes or any data entry errors at the time of online submission of ITR forms. The online help facilities and user guides help taxpayers right from tax registration to responding to a notice and filing appeals.
Specific benefits of digitization
Some of the anticipated benefits include minimising tax administration costs and enhancing taxpayer base. The information generated helps the government to focus on potential areas of gaps in tax compliance. From a taxpayer perspective, the taxpayer is able to meet all compliance obligations, right from tax registration, payment of taxes, tax return fling, responding to queries, filing grievances and appeals, etc. through a single portal.
The new portal would help taxpayers to track the status of their tax compliances starting from status of PAN – Aadhaar linking, tax profile updates, status of tax return filed/processed and not filed, status of refund, rectification, notices, assessments, appeals. This makes the tax related documents accessible to taxpayers at any point of time. The government’s introduction to the faceless assessment and appeal has simplified the process and minimised any potential harassment to taxpayers. Needless to state, the physical tracking of paper returns, and the related storage space issues have also been eliminated.
With the digitization of tools, communication to the taxpayer has become effortless and taxpayer receives automated alerts and notifications (via SMS and emails) for return filing, notices, processing of returns etc. making it easier for the taxpayer to action on it, if required and be updated on their tax compliance status.
Further, with the new updates on the tax return mapping, the government has taken steps to ensure that the details from the Form 16 (salary certificate), Form 26AS (tax deduction and collection certificate), capital gain details, details of financial transaction is directly prepopulated in the tax return at the time of filing the same. This not only reduces the time of the taxpayer to collate and feed in the data, but also helps the government in getting the integrated information at one place and could trigger automated notices where there is a mismatch in data available with the department and that reflected in the tax return.
One however, needs to remember that it is the obligation of the taxpayer to ensure compliance, and while reliance may be placed on the information that is provided through the portal, due diligence and caution to check out the information is always the responsibility of the tax payer. While digitization minimizes the challenges in collating information, it does not in any way minimize the tax payer obligations or responsibilities.
The authors,  Saraswathi Kasturirangan and Shalakha Kedia, are Partner with Deloitte India and Manager with Deloitte Haskins and Sells LLP respectively. The views expressed are personal
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