FM comes hard on ‘tax terror’; introduces ‘faceless’ scrutiny

NEW DELHI: Finance Minister Nirmala Sitharaman on Friday said that tax authorities do not have to overreach or harass as the tax targets set in the Budget are well within achievable limits.
The minister’s assertions came at a meeting here in which she announced a slew of steps to boost growth via reform measures. The minister also announced that the government would introduce “faceless” scrutiny of tax liabilities of individuals and corporates.
Lately India Inc has called for measures to curb “tax terrorism”.
Sitharaman said she has met several state tax officials and urged them not to stress on tax liabilities. She would also meet tax officials across the country and convey the message.
She said technology can be used to monitor tax payments and liabilities, which should be used by the authorities.
Announcing introduction of “faceless” scrutiny, the minister said from the upcoming Vijaya Dashami in October, no tax official will have to physically visit any individual for tax summons and monitoring.
She said that tax notices and summons without a computer generated unique ID number would not be valid. This measure would help curb unauthorised tax summons.
She said all pending IT notices will be disposed of within three months from the date of reply, adding all pending income tax notices till now will be resolved by October 1, 2019.
Additionally, IT notices will be sent through centralised computer system from October 1, 2019.
In a big relief to start-ups, the minister withdrew ‘angel tax’ provision for startups and their investors.
On violation of corporate social responsibility norms, the minister said such violations would not be treated as criminal offence. Prosecution will be replaced with a more humane approach and wealth creators will be honoured and respected, she added.
With an aim to check the massive outflow of foreign portfolio investment since the Budget, the government on Friday withdrew the surcharge levied on them.
As a result, the tax incidence for foreign portfolio investors (FPIs) will come down by 4-7 per cent removing the anomaly created in the Budget. The move will also cheer domestic investors as the withdrawal would also apply to them.
The action came weeks after FPIs turned net sellers after levy of surcharge in the Union budget and are estimated to have pulled out about Rs 8,500 crore since the budget announcement.
In her maiden budget, Finance Minister Nirmala Sitharaman raised surcharge on super-rich or those having annual taxable income more than Rs 2 crore. The surcharge of 25 per cent was levied on those having taxable income between Rs 2 crore and 5 crore, and 39 per cent on those with taxable income over Rs 5 crore.
In a sort of mini Budget which included a flurry of economy revival policy measures, Finance Minister Sitharaman on Friday announced that “the enhanced surcharge from long-term and short-term capital gains on FPIs stand withdrawn.” — IANS