To provide certainty and relief to institutional investors, the Finance Bill, 2021 (Bill) proposes to rationalise certain provisions relating to tax deduction and tax collection at source. The Bill also extends certain benefits to eligible start-ups by a year and proposes to penalize non-filers of income-tax returns.
With the assessment (before the tax assessing officer) and first appeal proceedings (before the Commissioner (Appeals) being already made faceless, to encourage greater efficiency and transparency in tax administration in India, the Bill suggests amendments to make the second appeal proceedings (before the tax tribunals) faceless as well. Additionally, due to several procedural delays, the experience of taxpayers in relation to the current advance ruling regime has not been satisfactory and therefore the Bill proposes an overhaul of the existing regime. It also proposes steps to provide certainty regarding tax assessments by inter alia reducing the time period for issue of notice for assessment or reassessment of income.
We discuss some of these developments below.
The amendment will take effect from 1 July 2021.
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