Get Two-year Window to Rectify Return

The Union Budget has sought to given opportunity to taxpayers to rectify mistakes related to misreporting of income when filling income tax return for a financial year. It has created a provision for allowing such taxpayers to file an updated return within two years from the end of the relevant assessment year. This is irrespective of whether the taxpayers have filed a return previously for the relevant assessment year, or not. This filing of the update return will be allowed only after payment of amount equal to 25% or 50% as additional tax on tax payable on the additional income furnished.

Currently, an individual gets time only till December 31 of the relevant assessment year to file a revised ITR. Sudhir Kaushik, CEO, Tax spanner, observes, “Sometimes the tax filers miss out on reporting certain income either due to ignorance or otherwise, but gets captured in the Annual Information Statement. This triggers a notice to the taxpayers who then has to go through a lengthy process of appeal. This new provision will ease the burden on tax payer.”

Further, as a deterrence against tax evasion, the Budget has provided that no set off of any loss shall be allowed against undisclosed income detected during search and survey operations. S-ET

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