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A STUDY OF RECENT CHANGES IN INCOME TAX POLICIES AND PORTAL

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Anima Chordia Shurveer S. Bhanawat

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Dogo Rangsang Research Journal UGC Care Group I Journal
ISSN : 2347-7180 Vol-13, Issue-6, No. 08, June 2023
A STUDY OF RECENT CHANGES IN INCOME TAX POLICIES AND PORTAL

CA. Anima Chordia, Research Scholar, Department of Accountancy and Business Statistics
Mohanlal Sukhadia University, Udaipur :animac4@gmail.com
Shurveer S. Bhanawat, Professor and Head, Department of Accountancy and Business Statistics
Mohanlal Sukhadia University, Udaipur :shurveer@gmail.com

Abstract
The Government of India has been amending tax laws regularly in order to meet the economic and
social requirements of the country. We have made a study of the recent amendments made by the
Government in direct tax policies and income tax portal of the Government. We have covered
abolishment of Dividend Distribution Tax, proposed Common ITR Form, Transparent Taxation
Platform scheme and the recently launched new income tax portal of the department.

Introduction
In India, a primitive tax collection system that dates back to ancient times is in place. A significant
portion of the Government's revenue comes from the collection of taxes. In India, there are two
different sorts of taxes: indirect taxes, which include customs, excise, goods and service tax, etc., and
direct taxes, which include income tax, corporation tax, etc. The system for collecting taxes is efficient,
and according to the government's most recent budget projections for 2023–2024, gross tax income
will be Rs. 33,56,385 crores. The Government of India continuously amends the tax laws in order to
meet the needs of the market economy. Tax policy is the term used to describe the rules and standards
that a government has created for the imposition and collection of taxes. It includes both
macroeconomic and microeconomic components, the latter of which focuses on the total amount of
taxes to be collected and how it will affect economic activity, while the former focuses on concerns of
fairness and efficiency in tax collection. A nation's tax policy is viewed as a key tool for influencing
the economy of that nation.

Objective
The objective of this article is to study the recent changes made in the direct tax policies and income
tax portal of the Government of India.

1. Removal of Dividend Distribution Tax (DDT)

The Government eliminated the Dividend Distribution Tax in the Union Budget 2020, which means
that dividends are now taxed in the hands of the receivers. The Government estimates that this action
will result in a loss of Rs. 25,000 crore in revenue. According to the centre, single-rate taxation is
inherently unfair because it benefits taxpayers in higher tax categories and works against those in lower
tax rates.
Dividend Distribution Tax
DDT was introduced in 1997, and the Income Tax Act Section 115-O granted for its regulation. A
company in India was obligated to pay 15% of the gross dividend amount within 14 days of the
declaration, payment, or distribution. After surcharges and cess were added, the actual rate rose to
20.56%. In accordance with the previous tax system, businesses were required to pay taxes twice: once
at a rate of 30% on Profit Before Tax (PBT) and other at a rate of 20.56% DDT on dividends paid from
Net Profit. Therefore, businesses had to shell out two taxes.

Impact of Removal of Dividend Distribution Tax on Different Segments

a) High Dividend Paying Companies
By eliminating DDT, dividend-paying corporations will no longer have to worry about complying
with regulations, which will lower their operating costs. Public sector entities and other private,
high dividend-paying corporations are on the list of major winners.
b) Retail Investors & HNIs

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The impact of removal of DDT is positive as well as negative for some investors, while for some it is
neutral.
Retail Investors in Lower Tax Bracket
Removal of DDT is positive for investors in the lower tax bracket (< 20%) as they will pay lower tax
according to their tax slabs.
Retail Investors in 20% Tax Bracket
Things stay the same for people in the 20% tax bracket. In the past, when firms paid the DDT of 20%,
investors received their dividends tax-free. The dividends received by investors in the said tax category
will now be subject to a 20% tax. DDT therefore has no effect on these investors.
Retail Investors in Higher Tax Bracket
Impact will be negative for the investors in higher tax brackets (>20%), HNIs (High Net Worth
Individuals) and company promoters which are in highest tax brackets. Investors in mutual funds who
chose dividend plans will also be impacted because they must pay tax on the dividends they receive.
Investors in mutual funds would therefore be better off switching from dividend plans to growth plans.
c) Promoters
Removal of DDT will badly impact the Promoters of Indian corporates. At present, investors in the
country need not pay any tax on income from dividends from domestic companies for upto Rs.10 lakh.
However, they are taxed at 10% for dividend income beyond Rs.10 lakh.
After the DDT is abolished, dividend recipients would be required to pay income taxes based on their
individual tax slabs, which can be as high as 43%. As a result, the Promoter owners who hold equity
personally or through trusts may suffer, especially if they fall within the 43% tax bracket. This could
alter the dividend culture of Indian corporations with significant promoter stakes and high dividend
payout rates. Lower dividends could be paid to their shareholders as a result. They might set aside a
larger share of their profits as retained earnings. Higher retained earnings could be put towards
investments and business growth. It will boost commercial activity and possibly lead to the creation
of new job opportunities.
d) Foreign Investors
For foreign investors, there will be no impact on countries which have Double Tax Avoidance Treaty
with India, whereas it will be beneficial for investors who live in Tax haven countries.
e) MNC / Foreign Holding Companies:
The largest winners will be multinational corporations because they were unable to receive credit for
the DDT that their Indian operations paid in their home countries. A DDT of more than 20% was
applied in India to dividends paid out by a global company's Indian affiliate. As a result, a significant
amount of indirect tax would have been paid on the dividend that the holding MNC business would
receive in India. In its home country, such a foreign firm would typically be obligated to pay tax on
the dividend income received. DDT is a levy levied against foreign businesses that get dividend
revenue in India but do not directly pay Indian taxes on it. As a result, these MNCs would be unable
to claim a foreign tax credit in their home country. These MNC holding companies received a double
blow as a result, as they were subjected to double taxes on a group basis. The elimination of DDT will
entice foreign holding firms to make investments in India without worrying about creative methods of
bringing back revenues from India.

2. Common Income Tax Return

The Income Tax Department has suggested to combine all existing income tax returns, with the
exception of ITR-7, into a single ITR to make compliance easier. Depending on the type of person and
nature of income, taxpayers are currently obliged to provide their income-tax returns in ITR-1 to ITR-
7. The ITR-7 is applicable to investment funds, business trusts, charitable organisations, etc. ITR-1
and ITR-4 will stay in place, nevertheless. Such taxpayers will then have the choice to file their returns
at their convenience in either the current forms (ITR-1 or ITR-4) or the proposed common ITR.
The suggested common ITR's structure is as follows:

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Dogo Rangsang Research Journal UGC Care Group I Journal
ISSN : 2347-7180 Vol-13, Issue-6, No. 08, June 2023
All taxpayers are required to provide basic information (comprising sections A to E), a schedule for
the computation of total income (Schedule TI), a schedule for the computation of taxes (Schedule TTI),
information regarding bank accounts, and a schedule for the payment of taxes (Schedule TXP).
 Based on the taxpayers' responses to a set of questions (called "wizard questions"), the ITR is
tailored for them and includes the appropriate schedules.
 The questions have been arranged so that, if any question receives a "no" response, the taxpayer
will not see the questions that are connected to it.
 Instructions have been provided that contain details on the pertinent schedules to assist with
submitting the return. Each row in the proposed ITR only has one unique value due to careful
design considerations. This will make filing tax returns easier.
 The ITR utility will be launched in a way that only relevant schedule fields are visible and
when multiple instances of the set of fields are required, they will appear.

3. Transparent Taxation Platform

The platform for "Transparent Taxation - Honouring the Honest" was introduced by Prime Minister
Narendra Modi on August 13, 2020, through video conference. He said that the platform includes
significant improvements like faceless assessment and appeal as well as a taxpayers' charter. India has
seen the emergence of a new tax administration governance paradigm over the last six years.
Government has improved openness, tax compliance, and public trust while decreasing complexity,
taxation, and litigation. A new technology is intended to speed up refunds and simplify compliance,
helping honest taxpayers. Government noted that the Indian tax system required fundamental
adjustments and stated that the goal was to make the process seamless, painless, and faceless.
What is Transparent Taxation?
Transparent Taxation is a platform or a new tax scheme to reward the “honest taxpayers” of the country
and make tax compliance easier as part of the government’s initiatives to reform direct taxes in India.
These reforms will change the way taxes have been paid in the country and make the process people-
centric and public-friendly. The platform brings in big reforms like faceless assessment, faceless
appeal, and taxpayers’ charter. (www.pib.gov.in, 2020)
What is Faceless Assessment?
The link between the taxpayer and the income tax department is eliminated by faceless assessment,
also known as faceless tax scrutiny. In this approach, only data analytics and artificial intelligence (AI)
tools will be used to choose a taxpayer. Additionally, territorial jurisdiction will be eliminated, and the
finalisation, review, and drafting assessment orders would all take place in other places. Additionally,
cases will be assigned automatically and at random. Additionally, the taxpayer won't have to go to the
income tax office or officer. Aside from the exceptions to the faceless scheme, the appellate decision
will also be team-based and scrutinized, and any assessment made will be illegitimate.
What is Faceless Appeal?
Under this approach, appeals will be arbitrarily assigned to any officer in the nation, and the handling
officers' identities will remain a secret. Additionally, there will be no need for a visit to the officer or
office. The appellate ruling will also be evaluated by a team. Serious frauds, massive tax evasions, the
Black Money Act, Benami property, etc. will be exceptions to this rule.
What is Taxpayer’s Charter?
The rights and obligations of tax officers and taxpayers are outlined in the taxpayers' charter, which
was made public during the release of the Union Budget for the 2020–21 fiscal year. By requiring
prompt services from the IT Department and holding it accountable while also enhancing services for
taxpayers, it is likely to empower individuals. The faceless assessment and taxpayers charter take effect
on August 13, 2020, and the faceless appeal service begins on September 25, 2020.

How will these changes benefit a taxpayer?

The goal is to simplify India's tax structure. Instead of involving every taxpayer, the tax administration
will seek to find a solution, trying to streamline the process and making sure it doesn't matter who is
the tax payer and who is the tax officer. Additionally, according to PM Modi, taxpayers will finally be

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treated with the trust and respect they merit. The measures are intended to increase compliance by
fostering more confidence, equity, transparency, efficiency, and accountability.
Important Features of faceless assessment scheme
 National E-Assessment Center (‘NEAC’) will be acting as a nodal agency and a single point
of contact and facilitator of all interaction between the taxpayer and the Income-tax authorities.
 Regional E-Assessment Centers (‘REAC’)- Assessment proceedings will be carried out by
this agency with support from various units such as the Assessment Unit, Verification Unit,
Technical Unit, Review Unit.
 All written submissions to the income tax authorities will happen through virtual and digital
means.
 From the date of 13th of August (2020), all assessment orders including those for ongoing
assessments are passed by NEAC under this particular scheme, except:- Assessment Orders
(cases assigned to central charges) and Assessment Orders (cases assigned to international tax
charges)
 Those assessment orders which are not passed in accordance with this scheme are to be treated
as non-est and are deemed to not have passed ever.
 The proceedings before the Dispute Resolution Panel (‘DRP’) would also become faceless
as provisioned by the faceless assessment scheme of the government.
 Under this scheme, personal appearances for hearing are prohibited or not required. The
tax authorities lay down standards, procedures, and processes, with approval from CBDT
 Certain key functions of taxation and other laws (Relaxation and Amendment of Certain
Provisions Act, 2020,) are provisioned to be carried out in a faceless manner by NEAC and
These include – Reassessment proceedings, Approvals, Registration, Revision, Rectification,
Transfer Pricing, stay of demand and tax recovery, Appeal efforts to appellate orders, TDS
Proceedings, Application for NIL or lower tax withholding certificate prosecutions.

4. New Online portal of Income Tax

The Central Board of Direct Taxes unveiled its new income tax website, www.incometax.gov.in, on
June 7, 2021. The previous e-filing income tax website, www.incometaxindia.gov.in, has been
replaced by this new income tax portal website. For the benefit of the taxpayers, they have opened this
new income tax portal. The new income tax portal is simple, adaptable, and user-friendly. Taxpayers
can now submit their taxes, file ITRs, and complete other tax- or verification-related tasks without
difficulty. The income tax division has made significant adjustments in addition to redesigning the
current portal. This new income tax webpage offers a functional approach in addition to being nice to
the eyes.
The comfort of taxpayers was taken into consideration when redesigning this portal. Making the new
income tax site into a single dashboard is one of the significant adjustments the income tax department
made. Taxpayers no longer need to dig deep to file ITRs, choose the right forms, and other related
tasks. Along with the already-existing features, many new ones have been added. This article discusses
the new features, the features from the old site, and what taxpayers can do on the new income tax
portal.

The New Income Tax Portal's features are as under:

1) Fast ITR Processor
With the new income tax site, one can get their filed income tax return processed right away. As
opposed to previously, when taxpayers had to wait weeks or months after filing ITR forms, this will
enable speedy money reimbursements.
2) ITR Preparation Software
In the past, submitting income tax returns was a time-consuming, stressful process that discouraged
many taxpayers from even bothering. For the convenience of taxpayers, this new income tax portal
offers free ITR preparation software. The latest ITR preparation software is free and includes a number

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Dogo Rangsang Research Journal UGC Care Group I Journal
ISSN : 2347-7180 Vol-13, Issue-6, No. 08, June 2023
of interactive questions to help taxpayers at every stage and ensure that their income tax returns are
filed without incident. solely the ITR-1 and ITR-4 forms are currently available in both online and
offline formats, with the ITR-4 form being available solely online. To make the process easier and
quicker, the remaining ITR forms (ITR- 3, 5, 6, and 7) will soon also be uploaded in the new income
tax login.
3) Call Centre and Chat Services
Two customer care features have been added to the new income tax portal for the benefit of the
taxpayers. There is a calling tool on the dashboard that enables taxpayers to speak with someone
directly about their problems, get answers to their questions, etc. In accordance with various regions
and places, a new call centre service has been introduced that offers a prompt response to taxpayer’s
inquiries. Additionally, the income tax division has increased the availability of frequently asked
questions, courses, videos, and a chat room where a person may speak with live agents who can assist
taxpayers with their problems.
4) Single Dashboard Interactions
The new income tax gateway website is easier to use than the old one. Since there is only one dashboard
gateway, everything can be found there without having to navigate to other pages. According to the
end-user, the dashboard has been separated. Any assessee, whether they fall under the Individual,
Company, HUF, Firm, or other category, merely needs to select the proper choice to access the entire
guidance system for submitting taxes, filing returns, or making other inquiries.
5) Multiple Modes of Payment
The Income Tax Department has since developed a number of payment options. Due to many
restrictions, the payment process has always been more challenging. A taxpayer can now easily submit
money from any bank account using their preferred method of payment. Several payment options are
available, including RTGS/NEFT, credit card, UPI transfer, and net banking from the taxpayer's non-
registered bank account as well as any other bank account.
6) Mobile App
The income tax department will soon release a new mobile app so that taxpayers may quickly access
the new income tax portal from anywhere in the world to submit taxes, file returns or check the status
of their accounts as long as they have internet connectivity.
7) Automatic Filled ITR Forms
Every piece of data for every taxpayer is saved and stored in a distinct single file by this new income
tax portal. The complete data management procedure has been made simpler. The new income tax
portal gives taxpayers access to ITR forms that are automatically pre-filled thanks to a single
restoration and data management system.
For the convenience of the taxpayer, information on the ITR forms such as salary, residential property,
business or profession, interest, dividend, and capital gains will be pre-filled. This will only occur,
though, if other parties, such as an employer, a property buyer, and banks, have already submitted
certain information on the taxpayer's behalf when submitting the TDS and SFT statements.

Carry Forward Features from Old Portal

Along with these brand-new capabilities, several legacy functions from the previous income tax site,
www.incometaxindiaefiling.gov.in, have been moved to the new portal, www.incometax.gov.in. For
e-filing tax returns and other purposes, the old income tax portal was used. All of those currently in
use features have now been moved to the new income tax portal. The following features have been
carried over to the new income tax portal:
• Filing audit reports and certifications;
• Checking and verifying tax credit statements (Form 26AS);
• Checking and viewing tax credit mismatch;
• Requesting and starting the re-issue of a refund;
• Filing a request for intimations;
• E-verifying the income tax returns;
• Checking the status of unresolved income tax returns; and

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 Dogo Rangsang Research Journal UGC Care Group I Journal
ISSN : 2347-7180 Vol-13, Issue-6, No. 08, June 2023
• Filing audit reports and certifications;
• Linking Aadhaar to PAN; submitting online complaints; asking for modifications to ITR
information; and responding to e-proceedings.
Taxpayers and tax officials can communicate with each other through the current web portal. The
former site was utilised by taxpayers for more than only ITR submission; it was also used for questions,
notices, responses, and further verification procedures. All of these formerly available functions,
including the final orders like assessments, appeals, exemptions, audits, and fines, have now been
moved to the new income tax portal.
Benefits Of New Income Tax Portal Website
The new income tax site is made available for convenience and management of the taxpayer. Quick
ITR processors have made it possible to refund filed tax returns quickly and intelligently. For quick
access, safe, and trouble-free fund transfers, additional quick and easy payment methods have been
added to the new income tax portals, including UPI, Net-banking, RTGS/NEFT, credit cards etc. Soon,
the new income tax portal website will also be available as a mobile application so that one can simply
access the online portal from any location without stopping what they are doing at that time. The new
income tax site is genuinely committed to its taxpayers and authorities, and it urges everyone to use it
for all tax-related transactions because it is the safest and fastest option. A taxpayer phone centre, live
chat, video training, and FAQs have been added by the income tax division to assure this. The new
income tax portal's single dashboard displays all services, interactions, uploads, and pending activities
on just one screen, enabling taxpayers to take easy follow-up actions. Free ITR preparation software
is now available both online and offline, enabling you to file ITR returns quickly and securely.
Additionally, when submitting TDS and SFT statements, ITR forms will immediately be pre-filled
with the data that was previously supplied.
By Taxpayers- Things to Do Section Before
accessing the new income tax portal to its full potential, taxpayers must complete a few tasks. The
Digital Signature Certificate (DSC) must be re-registered. Taxpayers must do it themselves rather than
transferring the outdated digital signature from the current portal since it raises security concerns.
Every taxpayer has been instructed by the income tax department to alter or update their user ID,
password, and mobile numbers under primary contact information in their profiles when registering or
at the time of a new income tax login.
Additionally, if they haven't already, taxpayers are recommended to link their Aadhaar with their pre-
validated bank accounts. To all taxpayers, there is a high-security alternative available. To ensure that
only taxpayers can access their accounts, it is advisable to reset their income tax site logins and e-filing
to greater security choices.

How To log in new income tax portal?

The new income tax portal's login procedure is simple and safe. Taxpayers can reset their accounts to
higher security levels by logging in with their PAN, Aadhaar, and other user IDs.
Step 1: Go to www.incometax.gov.in, the new income tax website.
Step 2: On the website's upper right corner, select the login link.
Step 3: Type PAN or Aadhar into the user ID field and press the proceed button.
Step 4: Enter the password in the box and click Continue to confirm the Secure Access Message.
Step 5: Check the box to have a 6-digit OTP sent to your primary registered mobile number, voicemail,
or text message. Click once more on Continue
Step 6: Correctly enter the 6-digit OTP within 15 minutes, then click Login.

Websites
1. www.pib.gov.in
2. www.incometax.gov.in
3. en.wikipedia.org
4. www.pmindia.gov.in
5. www.taxguru.in

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