Mitali
In Budget 2024, The Union Finance Minister has simplified the provisions for reopening and reassessment to reduce tax uncertainty and disputes, providing relief to taxpayers.
Here's the explanation:
Reopening Time Limit for Income Below Rs 50 Lakh
Cases can be re-open or re-assess income tax returns up to 3 years from the end of the assessment year if the escaped income is upto ₹50 lakh.
Let us understand this with an example
Let us assume that the escaped income for financial year 2023-24 is less than ₹50 lakh.
The assessment year will be 2024-25 to file the income tax return.
Reopening Deadline: Tax authorities cannot reopen or reassess this ITR after March 31, 2028 (3 years after the end of the assessment year 2024-25).
Reopening Time Limit for Income above Rs 50 Lakh
The reopening can occur up to a maximum of 5 years from the end of the assessment year, if the escaped income is over ₹50 lakh.
For Example
When the escaped income for FY 2023-24 is above ₹50 Lakh.
Reopening Deadline: The reopening cannot happen after March 31, 2030 (5 years after the end of the assessment year 2024-25).
For Search Cases
In cases where a search operation is conducted, the time limit for reopening is reduced from 10 years to 6 years before the year of the search.
Key points to Note
Income less than ₹50 lakh: Can reopen cases upto 3 years from the end of the assessment year.
Income more than ₹50 lakh: Can reopen cases upto 5 years from the end of the assessment year.
Search Cases: Reopening is limited to 6 years before the year of the search.
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