Income Tax: The IT department trusts your ITR completely, only one percent is investigated
Income Tax Trust-Based Model: Income Tax accepts your ITR as true. Only one percent of ITRs are investigated. The Income Tax Department works on a trust-based model.
ITR Scrutiny: The Income Tax Department trusts you completely. Whatever you file under ITR, it accepts it as true. It may sound a bit strange. But this is the reality. According to a report by the Economic Times, this is true in 99 percent of the cases. Only one percent of ITRs are investigated. In that too, in most of the cases, either there is a complaint or doubt arises due to some special reason. The Income Tax Department works on a trust-based model.
Scrutiny is done due to third-party reporting
According to the report of the Economic Times, one percent of ITRs which are investigated are selected after getting reliable information through third-party reporting. Despite facing criticism for aggressive income assessment notices, the truth is that the Income Tax Department rarely intervenes after ITR. The Income Tax Department takes action only after something uncomfortable comes out in algorithm-based data analytics. In that too, it gives an opportunity to present one's side after opening a case afresh for assessment. A lot of efforts have been made to keep it faceless and away from bias.
The system of tax dispute management is weak
The Business Standard report says that the Income Tax Department's system is very weak in resolving tax disputes. CAG i.e. Controller and Auditor General has also highlighted the shortcomings of the Income Tax Department in direct tax disputes. It has expressed concern especially on exaggerated tax demands, wrong interest levy and errors in implementing appeal orders, delay in refund and harassment of taxpayers due to this.
Disclaimer: This content has been sourced and edited from abplive.com. While we have made modifications for clarity and presentation.
