Income tax department notifies e-assessment scheme, 2019

The government has notified the e-assessment scheme, 2019 on Friday. This scheme covers the electronic assessment of income tax returns without any physical contact between tax officials and taxpayers. Only under special circumstances, physical presence will be allowed under the scheme. 

Introduction of the e-assessment scheme is a part of the government’s effort to reduce the physical involvement of taxpayers in the assessment and scrutiny of income tax returns. Also, this scheme would help eradicate the possibilities of corruption. An enabling provision for the scheme was introduced by the finance ministry in the tax law through the Finance Act, 2018. 

To test the feasibility e-assessment scheme, the income tax department has been running a pilot in selected cities of India for the last few years. The new system of tax assessment will reduce taxpayers’ visits to the income tax offices and will make the proceedings, faceless.

Also Read: AI and Machine Learning to Handle Tax Assessments

The e-assessment process will make use of machine learning, artificial intelligence, video conferencing, mobile applications and telecommunication applications. These measures have already been adopted long back by the emerged economies.

Even though the move to make the tax assessment faceless is excellent in principle but the procedures and the administrative systems need to be developed accordingly to ensure that it does not result in unfairness to the taxpayers. 

The scrutiny of assessment will be done electronically only but the appeals will be done through an individual’s representation or an appointed counsel.

The scheme will bring transparency to the assessment done by the income tax department and will also improve its image among the taxpayers. With a negligible human intervention, this move will impact the income tax compliance of the country positively.