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India is leading by example with its faceless E-assessment system for income tax

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    10th May, 2021


India is one of the few countries in the world to adopt the E-assessment and is now leading the world through the reforms in the indirect taxes.

About the faceless E-assessment system

  • Faceless Assessment is being initiated to remove the human interface between the taxpayer and the Income Tax (I-T) Department.
  • Features of the system
    • Selection of a tax payer only through system using data analytics and AI
    • Abolition of territorial jurisdiction
    • Automated random allocation of cases
    • Central issuance of notices with Document Identification No. (DIN)
    • No physical interface, no need to visit the income tax office
    • Team-based assessments and team-based review
    • Draft assessment order in one city, review in another city and finalisation in third city.

Exceptions: Cases relating to:

  • Serious frauds, major tax evasion, sensitive & search matters
  • International tax
  • Black Money Act and Benami Property

Significance of the scheme

  • The system comes at a very apt time, wherein the digital nature of the process ensures continuity in period of the Covid-19 pandemic.
  • India will be one of the few countries to have faceless assessment
  • If it gets implemented successfully, India can be an example for the rest of the world in leveraging technology for curbing undesirable practices and offering better services to its tax-paying citizens.
  • The scheme is expected to result in better quality of assessment orders while reducing potential harassment to taxpayers.

National e- Assessment Centre

  • The NeAC will be based in Delhi,
  • It will look after the functioning of the e-Assessment scheme.
  • The body would be headed by Principal Chief Commissioner of Income Tax.
  • Apart from assessment units, these centres would also be home to review, technical and verification units.
    • Additionally, there would be eight Regional e-Assessment Centres (ReAC) in Delhi, Mumbai, Chennai, Kolkata Ahmedabad, Pune, Bengaluru and Hyderabad.