August, 2020:  The scrutiny of tax returns has been reduced to one-fourth due to radical reforms introduced by authorities in recent months, said Prime Minister Narendra Modi on Thursday and asserted that taxpayers should be trusted in compliance matters.

"Out of all the tax returns in the year 2012-13, scrutiny of 0.94 per cent was done. In the year 2018-19, this figure has come down to 0.26 per cent. The scrutiny of cases has reduced by almost one fourth," the Prime Minister said at the launch of a platform for "Transparent Taxation-Honoring the Honest". "The taxpayer is now assured of fair, courteous and rational behaviour. The income tax department now has to take care of the taxpayer's dignity sensitively. Now you have to trust the taxpayer, the department cannot see it without any doubt without any basis. If there is any doubt, the taxpayer has been given the right of appeal," he said.

He emphasised the role of tax compliance in nation-building and said the government is following a policy-driven governance model.  "The emphasis is on making every rule-law, policy people-centric, and public friendly. This is the use of the new governance model and the country is getting its results," he said. The Prime Minister said that the new tax system is going to become faceless and this will give a belief of fairness and fearlessness to taxpayers.

Meanwhile, Union Finance Minister Nirmala Sitharaman said that the initiative is a landmark in the history of tax administration. "The Prime Minister's vision is to empower taxpayers, to provide a transparent system and to honour the honest taxpayer. To realise this vision, CBDT has given a framework and put in a place a system in the form of this platform," she said.

The Central Board of Direct Taxes has carried out several major tax reforms in direct taxes in recent years. Last year, the corporate tax rates were reduced from 30 per cent to 22 per cent and for new manufacturing units, the rates were reduced to 15 per cent. Dividend distribution tax was also abolished.