Tax Payer Charter And Its Benefits

In Budget 2020, the government has also proposed to create the Tax Payer Charter. During the Budget presentation, the Finance Minister Nirmala Sitharaman has pointed out that the government wants to give respect to the income earners. Thus they should not be harassed for the tax issues.

Moreover, the government wants to create a good faith between the tax payers and the administration. And there should be a clear environment of tax payers rights.

Thus do you want to know what is Tax Payer Charter and how it is beneficial for the tax payers? Let me tell you-

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What is the Charter?

Charter is like a Memorandum of Rights and Obligations. The Government of the different countries proposes the Charter to fix the rights of their citizens. This charter also includes the rights of the companies and other entities. It helps to create a good faith between the citizens and the government.

Because of the awareness of the rights, the citizens can share their issues with the government with more ease. Moreover, it also compels the executives and officials to do their duties more efficiently.

What is the Tax Payer Charter?

Same in this way, the Tax Payer Charter describes the rights of the Tax Payers. So it explains how they can interact with the Income Tax Department.

Along with the rights, there are also the obligations of the tax payers in the charter. Thus vice versa these obligations describe what the government expect from the taxpayers.

In short, Charter is a bundle of rights and obligations for both the citizens and the government.

What will be in the Taxpayers’s Charter of India?

In Budget 2020, the government has described for Tax Payer Charter in a short manner. And said it will be declared soon. So it is still not clear, what will be in India’s Charter. But as I told you, the government of some countries have already issued these charters. So if the India Government is inspired from these charters then we can expect how will be the tax payer charter of India.

Basically, the tax payer charter has two parts. The first is rights of the tax payers and the second is the obligations of the tax payers. So we should expect that in India’s charter there will almost the same features as well.

Few countries like Britain, Australia, Hongkong have its Tax Payer Charter. Thus most probably India’s Tax Payer Charter will be as follows.

Your Rights i.e. Expectation from the Government

To enhance the faith with the citizens the Government is trying different means. Tax charter is one of them. This new provision is to protect the citizens from the harassment by the junior tax officers. Let us see what will be the rights available to you-

1. The Department will Respect You and will Consider Honest

Income Tax Department will consider you as an honest tax payer. And your honesty will remain up to the tax evasion proven. It means the tax department will give you a complete chance to prove yourself as an honest tax payer.

If you do a mistake it will not be considered that you have done it intentionally. Even the department will give you a full opportunity so that you may rectify your mistake.

Thus in this way, the tax department will give you respect for which you are eligible. Because till now there is a presumption in the department that a general tax payer is naturally tax evasive.

2. You will Get the Professional Service

Now the Income Tax Department will behave with you in a professional manner. So, the department will communicate you only in writing. Moreover, you will get the complete and current status of your issues time to time.

Thus you may know how much time it will take to resolve your problem. And if you face any issue you may take help of the officials as well.

3. You may Appoint Your Representative

In this sequence, you may choose to appoint a representative. The representative will convey your problem to the officers and will try to resolve the tax dispute on your behalf. Moreover, you can appoint a tax lawyer as a representative for you as well.

4. Promise for Privacy

As you know the tax department already knows your income and tax details. Thus, most of the people are also afraid of the leakage of confidential information. But now not to worry. The Charter will help you. There will be an appropriate provision for the privacy of your financial information.

5. Right to Question

You have already a right to challenge the decision of the tax department. But now it will be in a more effective form. Hence when you will ask a question to the department, it would give you the answer in an appropriate time and manner.

Moreover, you can also lodge a complaint against the tax department to the upper authorities.

6. Protocol for the Notice

After the implementation of the charter, the tax officer must follow the complete procedure of notice to the taxpayer. So, firstly the officer has to submit the notice in a portal linked to higher officials. The higher officials will do the scrutiny of the notice. If they find it correct then they will issue a Document Identification Number (DIN) on it. After this, the officer will send you the notice.

Without the DIN any notice will not be valid. So if you receive a notice without the DIN, no need to take it seriously. And no requirement to answer it. As you can consider it as an invalid notice.

Your Obligations – Expectations of the Government

Along with the rights you have also some duties as a tax payer. The Government expect you that you will fulfil those obligations.

1. Share the Correct Information

The Income Tax department will expect you that you will give the complete and correct information of your all income and tax liability. In addition, you will give all the necessary facts to the department on demand.

Also, you will answer the department whenever it wants you through notice. Hence it will surely create a good faith between you and the department.

2. Keep Records

Although it is necessary that you must keep safe your income and taxation records. So that the income tax department may get the correct information about your income and tax calculation. Now, it will be a part of your duty to keep all the records of your income and expenses safely for future reference.

3. Tax Payment Before Due Date

The Income Tax Department will expect you that you will pay income tax on time and honestly before the due date. As you know, because of your timely payment of tax the government use it to finalize the different types of its expenditures.

Thus you must pay your tax on time to contribute to the development of the country. Moreover, you should submit your Income Tax Return (ITR) on time as well.

4. Co-operate With the Department

Also, you would have to co-operate with the tax department for its investigations. The Government expect you that whenever it is required you will give complete information to the department. In addition, you would have to present yourself before the tax officials when they will ask you.

Hence, it must be the main features of the Tax Payer charter of India. Wait for this. Soon it will be in front of you.