The measure, likely to be introduced in the budget in February, will eliminate the need for all human interactions in scrutiny of tax returns and replaced with an online system.
India plans to overhaul its tax assessment and investigation process for the nation’s top 500 companies as part of PM Narendra Modi’s effort to improve ease of doing business and curb corruption, people with knowledge of the matter said.
The measure, likely to be introduced in the budget in February, will eliminate the need for all human interactions in scrutiny of tax returns and replaced with an online system, the people said, asking not to be identified as the matter is private. In case more information is sought, the company’s response will not end with the same set of officials, as it will be determined by an algorithm, eliminating discretion, they added.
India is ranked 119 out 190 countries when it comes to ease of paying taxes, according to the World Bank’s latest doing-business survey.
The e-assessment system will require the information technology wing of the direct tax office to undergo a major revamp. Once successful, this will be expanded to cover other tax payees, the people said.
In the new system, assessing officials will be chosen electronically, making their location irrelevant, the people said. The measure will also help weed out corruption associated with posting of tax officials who often seek to be based in large cities, especially Mumbai, home to the headquarters of most large Indian companies.
Source: Economic Times/ Bloomberg