A Guide on Faceless Income Tax Assessment Scheme

FACELESS INCOME TAX ASSESSMENT SCHEME

 

Faceless Income Tax Assessment is a new system of income tax assessment introduced by the Indian government in 2020. It is designed to make the assessment process more efficient and fair, while also reducing face-to-face interactions between taxpayers and tax officials.

Under the faceless assessment system, all communication between the taxpayer and the tax department is done electronically through the official e-filing portal. The assessment process is also carried out by a team of tax officials located in different parts of the country, rather than by a single tax officer. This is done to minimize the potential for bias and ensure that assessments are carried out impartially.

The faceless assessment system includes the following features:

  1. Centralized Processing: All returns are processed at a centralized location, and the assessment order is passed by a team of officers located at different places.
  2. Automated Scrutiny: The returns are selected for scrutiny through a computer-aided selection process, rather than manual selection.
  3. Faceless Appeal: Appeals against the assessment order are also heard by a team of officers located at different places.
  4. E-Proceeding: All proceedings and communications between the taxpayer and the department are conducted through the e-filing portal.

The faceless assessment system aims to make the tax assessment process more efficient, transparent, and fair for taxpayers. It is important to note that the faceless assessment system is not applicable to all assessments, only to certain types of assessments.

 

How Does the Faceless IT Assessment Work?

 

The faceless income tax assessment system works by automating the selection process for scrutiny of tax returns, and by conducting the assessment process through a centralized system. The system uses an algorithm to select returns for scrutiny, rather than manual selection by a tax officer.

The process is initiated when a taxpayer files their income tax return on the e-filing portal. The return is then processed by a centralized system, which uses an algorithm to select returns for scrutiny. If a return is selected for scrutiny, the taxpayer will receive an electronic notice with a list of queries and documents that need to be submitted for the assessment process.

Once the taxpayer submits the required documents and answers the queries, the assessment process is carried out by a team of tax officials located in different parts of the country. The team will conduct the assessment and pass an assessment order without any personal interaction with the taxpayer.

The taxpayer can access the status of their assessment and communicate with the assessing officer through the e-filing portal. The taxpayer can also file an appeal through the e-filing portal, which will be heard by a team of appellate officers located in different parts of the country.

It’s worth noting that the faceless assessment system is not applicable to all types of assessments. It is currently only applicable to a certain category of cases, and the government may expand the scope of faceless assessment in the future. It is always advisable to consult with a tax professional or check with local tax authorities

Advantages of Faceless Assessment Scheme:

The faceless income tax assessment scheme introduced by the Indian government has several advantages, such as:

  1. Transparency: The system is designed to make the assessment process more transparent by eliminating face-to-face interactions between taxpayers and tax officials. This reduces the potential for bias and ensures that assessments are carried out impartially.
  2. Efficiency: The system is automated and centralized, which helps to make the assessment process more efficient. Taxpayers can access the status of their assessment and communicate with the assessing officer through the e-filing portal.
  3. Reduced Compliance Costs: The faceless assessment system reduces the need for taxpayers to travel and meet tax officials in person, which can save time and money.
  4. Reduced Harassment: The faceless assessment system reduces the possibility of harassment by tax officials, as the entire process is done electronically and without personal interaction.
  5. Fairness: The system is designed to ensure fairness by automating the selection process for scrutiny of tax returns and conducting the assessment process through a centralized system with a team of officials.
  6. Increased Confidence: The faceless assessment system increases the confidence of taxpayers in the tax system by making the assessment process more transparent, efficient, and fair.
  7. Better Utilization of resources: The faceless assessment system allows the tax department to utilize its resources more effectively by eliminating the need for tax officials to travel and meet taxpayers in person.

It’s worth noting that the faceless assessment system is still new and its effectiveness will be evaluated over time. It is always recommended to consult with a tax professional or check with local tax authorities for specific guidance.

What is the Process of the Faceless Tax Assessment?

The process of faceless income tax assessment can be broadly broken down into the following steps:

  1. Filing of return: Taxpayers file their income tax returns on the e-filing portal.
  2. Selection for Scrutiny: The returns are processed by a centralized system, which uses an algorithm to select returns for scrutiny. If a return is selected for scrutiny, the taxpayer will receive an electronic notice on the e-filing portal.
  3. Submission of documents and answering queries: Taxpayers submit the required documents and answer the queries raised in the notice, through the e-filing portal.
  4. Assessment: A team of tax officials located in different parts of the country conduct the assessment and pass an assessment order, without any personal interaction with the taxpayer.
  5. Communication: Taxpayers can access the status of their assessment and communicate with the assessing officer through the e-filing portal.
  6. Appeal: Taxpayers can file an appeal through the e-filing portal, which will be heard by a team of appellate officers located in different parts of the country.

It’s important to note that the faceless assessment system is not applicable to all types of assessments and it is currently only applicable to a certain category of cases. The government may expand the scope of faceless assessment in the future. It is always recommended to consult with a tax professional or check with local tax authorities for specific guidance.

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