The Ministry of Finance has introduced several measures to simplify income tax and GST processes for small taxpayers. These reforms are designed to ease the burden of compliance, reduce operational complexities, and promote voluntary tax filing.
Income Tax Reforms
The government has focused on simplifying income tax filing with several key initiatives:
- Multiple Filing Options: Small taxpayers can file their Income Tax Returns (ITR) online, offline, or using Excel utilities, providing flexibility to suit different technical capabilities.
- Pre-filled Forms: To reduce errors and manual data entry, ITR forms now come with pre-filled information, including income details, tax payments, and other relevant data from sources like Form 26AS and the Annual Information Statement (AIS).
- Aaykar Seva Kendras (ASKs): The establishment of 457 ASKs across India provides taxpayers with in-person assistance for income tax queries and grievances.
- Taxpayer Education: The Income Tax Department has created instructional videos on its YouTube channel and publishes informative brochures to guide taxpayers through the filing process.
GST Reforms
The GST portal and regulations have also been updated to benefit small taxpayers:
- Auto-Generated Returns: The GST portal now provides an auto-generated return feature that compiles outward supply details. Taxpayers can edit this information before submission, simplifying the filing process.
- Expanded Composition Scheme: The turnover threshold for the composition scheme under GST has been increased from ₹75 lakhs to ₹1.5 crore, allowing more small businesses to opt for this simplified tax compliance option. The threshold for special category states is generally ₹75 lakhs, though some have a lower limit.
- Digital Payments: The government has expanded payment methods to include digital options like UPI and IMPS, making GST payments more convenient.
- Exemption for E-commerce: Mandatory GST registration for intra-state supply of goods through e-commerce operators has been conditionally waived for small businesses, reducing their compliance burden.
- Fast-Track Approvals: For new registrations, applications authenticated via Aadhaar are now approved within seven working days, significantly reducing processing time. Applications without Aadhaar authentication are processed within 30 days.