Taxpayers alert: Govt proposes measures to rationalise Income Tax Act provisions | Top points
India Today
In her budget speech, FM Sitharaman announced a one-time window for taxpayers to correct any discrepancy or omissions in their Income Tax Returns (ITRs) within two years of filing, subject to payment of taxes.
The government, in Union Budget 2022, has proposed a host of measures to rationalise various provisions of the Income Tax Act.
In her budget speech, Finance Minister Nirmala Sitharaman announced a one-time window for taxpayers to correct any discrepancy or omissions in their Income Tax Returns (ITRs) within two years of filing, subject to payment of taxes.
An additional 25 per cent on the due tax and interest would have to be paid if the updated ITR is filed within 12 months, while the rate will go up to 50 per cent if it is filed after 12 months, but before 24 months from the end of the relevant assessment year.
Currently, if the I-T Department finds out that some income has been missed out by the assessee, it goes through a lengthy process of adjudication, and the new proposal would repose trust in the taxpayer.
"To provide an opportunity to correct such errors, I am proposing a new provision permitting taxpayers to file an updated return on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year," Sitharaman said in her 2022-23 Budget speech.
This is an "affirmative step in the direction of voluntary tax compliance", she added.
The government has also proposed several other measures to rationalise various provisions of the Income Tax Act.