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How Budget 2021 has reduced taxpayers’ rights

How Budget 2021 has reduced taxpayers’ rights

The Budget FY22 presented by finance minister Nirmala Sitharaman on February 1, 2021, was commendable for various reasons—not imposing additional tax burden on taxpayers, substantially increasing capital expenditure, choosing to go beyond the fiscal deficit of 3.5% to spur growth and announcement of disinvestments to meet the deficit. One of the changes not announced in the Budget speech, but mentioned in the Finance Bill, 2021, is the abrupt replacement of two quasi-judicial authorities with administrative bodies.

The Finance Bill, 2021, proposes to replace two quasi-judicial bodies such as the Income-Tax Settlement Commission (ITSC) and the Authority for Advance Rulings (AAR) with administrative bodies, comprising of chief commissioners of income-tax. The finance ministry abruptly discontinued the ITSC from February 1, 2021, and replaced it with one or more ‘Interim Boards for Settlement’. Every Interim Board will consist of three members, each being an officer of the rank of chief commissioner, nominated by the CBDT. Consequently, no new application can be made for settlement of cases from February 1, 2021.

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