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Fiscal Developments 65

The taxpayer’s charter for India comprises of commitments by the Income Tax Deparment
and obligations of the taxpayers. A detailed discussion on the taxpayers’ charter may be seen
in Box 3.

Box 3: Introduction of Taxpayers’ Charter

Traditionally tax administrations paid limited attention to taxpayer service while performing the
functions of regulator and enforcer of tax laws. However, due to an increased demand for better
services to the tax payers, there has been a worldwide recognition of the rights of the tax payers, by
publishing formal ‘taxpayers’ charters’ or including behaviour expected from officials in the revenue
body’s ‘mission statement’. For instance, the concept of taxpayers’ Bill of Rights was first introduced
in the US in 1988 and the Taxpayer Bill of Rights, which grouped the existing rights in the tax code
into ten clearly defined fundamental rights and applied to all taxpayers, was adopted by the revenue
authorities in 2014. Similarly, the Canadian taxpayers’ Bill of Rights defining 16 taxpayers’ rights,
was adopted in May 2007 to increase the accountability of the Canada revenue Agency to taxpayers
and to enhance the level of awareness among taxpayers about their rights and avenues of redress
when dealing with revenue authorities. The UK government published its first charter concerned with
taxpayer interactions with revenue authorities in 1986, and adopted the new publication ‘Your Charter’,
which explicitly sets out rights and obligations of taxpayers in 2009 (subsequently refreshed in 2016).
The introduction of taxpayer charter by Government of India as a part of the ‘Honoring the Honest’
platform is, thus, an important step in this direction, as it emphasizes the importance of fair, courteous
and reasonable treatment to taxpayer. The tax payer charter includes the following, as a part of Income
Tax Department’s commitment:
1. Courteous, fair and reasonable treatment to taxpayers.
2. Treatment of taxpayers as honest unless the department has a reason to believe otherwise.
3. Fair and impartial appeal procedure and review mechanism.
4. Accurate and complete information for fulfilling tax compliance obligations under the law.
5. Timely decisions in every income tax proceeding (within the time prescribed under law).
6. Collection of the correct amount of tax due as per the law.
7. Respect for taxpayer’s privacy by following due process of law, and ensuring no more
intrusive than necessary in inquiry, examination, or enforcement action.
8. Maintaining confidentiality by not disclosing any information provided by taxpayer to the
department unless authorized by law.
9. Ensuring accountability for the actions of the tax authorities.
10. Provision to allow taxpayer to choose an authorized representative of his choice.
11. Provision for a mechanism to lodge complaint and ensure its prompt disposal thereof.
12. Fair and impartial system and resolving the tax issues in a time-bound manner

13. Publishing the service standards and report periodically by the Tax Department.
14. Reduced cost of compliance as the Department shall duly take into account the cost of
compliance when administering tax legislation.

The taxpayers’ obligations specified under the Charter are:
1. Taxpayer is expected to honestly disclose full information and fulfil his compliance obligations.