Income tax Authorities PPT

The Indian tax authorities also cooperate with tax authorities in other countries to share information. India has entered into a few double tax avoidance agreements, tax information exchange agreements, free trade agreements, progressive trade agreements and comprehensive economic partnership agreements with other jurisdictions. There has been an increasing focus on sharing of information between Indian tax authorities with their foreign counterparts on tax avoidance.

1. Finance Bill 2012 seeks to grant Income Tax Department powers to combat aggressive Tax avoidance by enforcing General Anti Avoidance Rules.
2. The CBDT provides inputs for the policy and planning of direct taxes in India and is also responsible for the administration of direct tax laws through the IT Department.
3. There is a Taxpayers’ Charter issued by the Income Tax Department that expresses commitment towards, for example, accountability, equity and transparency.
4. The next two appellate fora, the high court and the Supreme Court, are formal civil courts that deal with only those matters that involve a substantial question of law.
5. Now, taxpayers can confirm their returns online using methods like Aadhaar OTP, which speeds up processing and refunds.

Directorates

The high court may issue a writ to release an assessee from illegal detention by the officer concerned. The court will interfere by way of writ if the action is mala fide or arbitrary or does not comply with the statutory requirement. A writ petition acts as an effective tool in the legal system of India, leading to speedy redressal of the grievances of taxpayers and coming to the rescue of them as an overstepping authority in the case of injustice caused by the authorities. The taxpayer need not pay the whole amount of tax in dispute before bringing a claim before the court and can apply for a stay in respect of the demand raised by the tax authorities.

The CBDT works very closely with the Ministry of Finance on many financial issues, especially when preparing the national budget. Recently, programs like the Vivad se Vishwas Scheme have successfully settled many long-standing tax disagreements. The department can survey any business premises during the time such place is open for business for physical verification of records and other valuables. Section 133A of the Income Tax Act 1961 provides the department to conduct surveys. There are 10 specialised directorates within the Income Tax Department, most extensive and famous among these being Directorate of Investigation. A sales tax of 4 percent is charged when the transaction is between two registered dealers whilst sales tax of 10 percent is charged in all other cases.

1. Customs duty is leviable on imports into India and is payable when the goods are cleared.
2. The Central Board of Direct Taxes (CBDT) is at the heart of India’s direct tax system.
3. Understanding the CBDT is crucial for UPSC aspirants as it falls within the scope of the UPSC Syllabus, specifically in the areas of the Indian Economy, Governance, and Taxation.
4. This is important for aligning the country’s fiscal policies with its economic objectives.
5. However, in the Goods and Services Tax (GST) Appellate Tribunal (yet to become functional), the bench shall comprise a judicial member and two technical members (one representing the centre and the other the state).

Ancient times

However, it is very uncertain whether similar schemes will be launched in the future. Likewise, there are no specific amnesty programmes provided in the indirect tax laws. However, the benefit of a reduced quantum of penalty can be availed if the tax and interest short paid are paid voluntarily within a specified time frame. Under GST laws, the information shared between taxpayer and lawyers is protected by attorney-client privileges guaranteed under the Indian Evidence Act 1872. Also, as per the indirect tax laws, the tax authorities are empowered to enquire about and request any document or information whether it is confidential or not.

In its quest for information, the tax authority can in specified circumstances resort to the rather intrusive procedure of a survey at the business premises of the taxpayer. Penalties cannot be imposed on the taxpayer if the taxpayer is able to prove that he or she was under a bona fide belief that there is reasonable cause for the failure. Under the GST laws, the penalties are calculated as a percentage of the tax amount due to be paid to the government. Depending on the nature of contravention or violation, the penalty amount ranges from 10 per cent of the tax amount to an amount equal to the tax due, namely, 100 per cent of the tax amount.

Understanding the Role of the Central Board of Direct Taxes (CBDT)

The Aadhaar card  is used by the Indian government to offer its citizens a number of services. Through initiatives like faceless assessments, e-filing portals, and digital grievance redressal mechanisms. Circulars focused on digital taxation, clarifications on deductions under various sections, and corporate tax reforms. With initiatives like e-invoicing and GSTN integration, CBDT is moving toward a more digital tax ecosystem, ensuring ease of doing business and faster compliance. CBDT is focused on emerging trends such as artificial intelligence, big data, and blockchain to make tax administration more efficient and transparent.

The CBDT was officially created under the Central Boards of Revenue Act of 1963, but its history goes back even further. In 1924, a Board of Revenue was set up to make tax collection more efficient in British India. After India gained independence, this board was split into two parts, one dealing with direct taxes and the other with indirect taxes, which eventually led to the formation of the CBDT. Assessment is done to ensure correct estimation of total taxable income of an assessee (i.e. taxpayer) and it determines amount of tax to be payable by (or to be refunded to) assessee. Most income tax returns filed are processed by the Centralised Processing Center in Bengaluru26 on the basis of the information provided by the taxpayer. Such automatic processing of returns is called as «summary assessment» and is carried out in accordance with sub-section (1) of section 143 of the Income Tax Act, 1961.

Who constitutes Central Board of Direct Taxes?

Where the privacy of taxpayers is violated, there lies effective remedy in the Constitutional the cbdt is a statutory authority functioning under the Courts. The information exchange between taxpayers and their legal advisors, which includes commercial information, business secrets and professional advice, is protected from disclosure through attorney–client privilege under the Indian Evidence Act 1872. Goods and services tax (GST) is leviable on taxable supply of goods or services, or both.

Q10. What are Double Taxation Avoidance Agreements (DTAAs)?

The tax department also obtains the required information from foreign tax authorities to conduct an effective assessment. Such an exchange of information can be upon specific request by the other country under the tax treaty. A Dispute Resolution Panel (DRP) is a mechanism that applies to Indian companies where the tax authorities have proposed adjusting the arm’s-length price. The direction from DRP is required to be passed within nine months from the end of the month in which the draft order is forwarded to the taxpayer by the tax officer. Such directions issued by the DRP are binding on the tax officer, who is required to pass the final order based on such directions, which is appealable directly before the second appellate authority. CBDT’s efficient collection of direct taxes, including income tax and corporate tax, plays a crucial role in financing India’s development projects, infrastructure, and welfare programs.

India does not accept a mandatory binding arbitration mechanism specifically for tax disputes on grounds of sovereignty. In addition to the above, the tax authorities have the power to issue a summons, and they have the same powers as those of a civil court trying a suit. Such powers include discovery and inspection, enforcing the attendance of any person (including any officer of a banking company) and examining him or her on oath, compelling the production of books of accounts and other documents. The exchange of information is primarily meant to determine if there is a case of tax evasion or tax avoidance by the taxpayer.