Budget 2022: Promoting Voluntary Tax Compliance and Reducing Litigation

Last updated: 02 February 2022

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Quick Summary

The government is introducing a new provision to allow taxpayers to file an updated Income Tax Return. This new facility, under Section 139 of the Act, provides an extended window of up to 24 months from the end of the assessment year to file updated details of income. Taxpayers opting for this will need to pay an additional tax, which will be 25% or 50% of the aggregate of tax and interest due, depending on when the updated return is filed. This initiative aims to promote voluntary tax compliance and reduce litigation by providing a more flexible and straightforward process.

Provisions for filing of updated return Section 139 of the Act is related to the provisions for filing of Income Tax Return by taxpayers. 2. Sub-section (1) of section 139 of the Act casts responsibility on the taxpayer to furnish a return within a definite time period or up to a particular date, that is, the due date which as per this section means: (a) for an assessee who is a company or a person (other than a company) whose accounts are required to be audited under this Act or under

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FAQ :

A new sub-section (8A) is proposed for Section 139 of the Income Tax Act, allowing any person to file an updated return of income within twenty-four months from the end of the relevant assessment year.

Any person can file an updated return, whether they have filed a return previously for the relevant assessment year or not, provided certain conditions are met.

An updated return cannot be filed if a search has been initiated, surveys conducted, or if certain notices have been issued regarding seized assets or documents belonging to the taxpayer or related to them. It also cannot be filed if an updated return has already been filed for that year, assessment proceedings are pending or completed, or specific information has been received from other agencies or countries.

An additional tax of 25% of the aggregate of tax and interest is payable if the updated return is filed within twelve months from the end of the assessment year. If filed between twelve and twenty-four months, the additional tax increases to 50%.

These amendments will take effect from 1st April 2022.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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