In the backdrop of the prolonged Covid-19 pandemic, the Government has been working towards minimising tax litigation and easing compliance for taxpayers. In line with this objective, the Finance Bill, 2022 (Bill) has proposed several amendments, some of which are discussed below.
The (Indian) Income Tax Act, 1961 (ITA) requires taxpayers to file income tax returns up to the prescribed due date. Taxpayers are also permitted to file belated and revised tax returns, which may be filed up to 3 months prior to the end of the assessment year or before the completion of assessment, whichever is earlier. At times, the additional time provided to file belated / revised returns proves inadequate, given the voluminous nature of the tax filings.
The Bill proposes to provide taxpayers with additional time of 24 months from the end of the assessment year for filing of updated tax returns. An updated tax return may be filed by taxpayers irrespective of whether a tax return was previously filed for the relevant assessment year. The taxpayer would be required to pay additional tax (in addition to the regular tax due on the additional income) before filing an updated tax return.Download PDF to read more
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