Quick Summary
The income-tax department has begun scrutinizing cases for the assessment year (AY) 2018-19 to identify those that need to be reopened, potentially resulting in a wave of tax notices. This follows the Union Budget 2024 announcement to reduce the time limit for tax reassessment from 10 years to five in cases of escaped income. New Reassessment Provision Effective September 1 Effective September 1, the new provision will make past assessments for AY 2018-19 time-barred. Initial letters issued
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FAQ :
The department is scrutinising these cases to identify those that need to be reopened for reassessment, following the Budget 2024's reduction in the time limit for such actions.
The new provision for tax reassessment is effective from September 1.
If your information is flagged as high-risk by the tax system, you will be informed and given one week to respond. Failure to respond will result in the case being automatically reopened.
The time limit for tax reassessment has been reduced from ten years to five years in cases where income has escaped assessment. For normal cases, reassessment beyond three years is only possible if the escaped income is Rs 50 lakh or more, up to a maximum of five years.
The simplification aims to reduce litigation and streamline tax processes for both taxpayers and the tax administration.
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