Quick Summary
The Income Tax Bill 2025 proposes a major shift in tax reassessment rules, allowing authorities to issue notices under the General Anti Avoidance Rules (GAAR) even for tax years that have crossed the prescribed time limits. If approved, this change will empower tax officers to revisit transactions e
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FAQ :
The bill proposes to allow tax authorities to issue reassessment notices under GAAR for tax years that have passed their statutory time limits, if the case was referred to the GAAR Panel within the allowed period for the primary assessment year.
Currently, reassessment notices must be issued within five years and three months from the end of the relevant assessment year, and only if unreported income exceeds ₹50 lakh.
GAAR stands for General Anti-Avoidance Rules, which empower tax authorities to reclassify transactions as impermissible and recompute tax liabilities if they are structured primarily for tax avoidance.
The GAAR Approving Panel is led by a serving or retired High Court judge.
Businesses, investors, and multinational corporations engaging in cross-border transactions may face an increased risk of retrospective reassessments, making it crucial to proactively assess their tax structures.
The final decision will be made after the Income Tax Bill 2025 is reviewed by the Lok Sabha Select Committee on March 6-7, 2025.
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