Direct Tax Reform | Tax Automation in Faceless Assessment

The inevitability of adapting automated tax reform under Direct Tax Function

India’s Tax Function has gone through substantial changes in the last 4 years. The transformations have taken place significantly to keep up with social transformation, globalization, and digitization.

In this paradigm shift we have been seeing technology reforms in Direct & Indirect Tax function in India. With the introduction one of the recent change is “The Faceless Assessment Scheme 2020” resulting corporate sectors are in great dilemma to streamline the direct tax function to comply with the present tax laws and to avoid tax penalties.

Simplified meaning of Faceless Assessment:

It is a faceless process for income tax assessment without the presence of human interface. The selection of the cases for scrutiny will have no human intervention and therefore it will be impartial.

But what we need to understand is if these reforms are useful to us? Let us understand the pros and cons of the reform in faceless assessment:

Pros of the reform:

• Fully Automated process with no human interface
• Time and Cost saving for Assesses by avoiding multiple visits
• Taxpayer selection through AI-ML & Data Analytics
• Automated allocation of cases on random basis
• Elimination of territorial jurisdiction
• No need to be present at the income tax office
• Draft assessment in one city
• Review in another city
• Finalization in 3^rd city

Cons of the reform:

• Exceptions in cases assigned to central charges
• Exception in cases assigned to international tax charges
• Cases relating benami properties not included
• Black money act not included

Despite few cons which are not covered under the current purview of faceless assessment, most pros indicating the importance of tax automation and its benefit.

How Xebia can help:

Xebia helps corporates to comply with customized tax solution in all the tax laws and avoid penalties at any cost.

• Xebia provides customised tax solutions for your complex business requirement that helps you to leverage maximum benefit and keep you 100% compliant with all tax laws.
• Xebia helps you in managing tax transactions with integrated process and automation with your ERP or any accounting application. Further, helps you to compute tax accurately, records real time transactions and prepares electronic return for filing over govt portal.
• We offer assistance to generate automated assessment documents which will be required for faceless assessments any time anywhere.
• Our core capability in developing customised tax application with the help of latest technology as AI, ML & Data Analytics which will help you in managing large data and integrate ERP to third party application to solve your complex business tax scenarios.