Sitharaman said during the budget announcement that to provide an opportunity to correct an error, taxpayers can now file an updated return within 2 years from the relevant assessment year.
Finance Minister Nirmala Sitharaman presented her fourth Union Budget in Parliament today. While reading out the digital Budget, FM Sitharaman said that the government will give an opportunity to those taxpayers who missed filing their income tax return correctly.
Sitharaman said during the budget announcement that to provide an opportunity to correct an error, taxpayers can now file an updated return within 2 years from the relevant assessment year. However, the government will not allow any tax rebate, said the Finance Minister.
The Finance Minister said that this is being done with an intent to establish a more trustworthy tax regime which will further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation.
Reacting to the announcement made by FM, Archit Gupta, Founder, and CEO, Clear said, “If the time for revising ITR has passed or it has already been assessed, a taxpayer could no longer amend and pay additional taxes. (Earlier time period was end of AY). If the taxpayer wants to pay additional taxes and amend an already-filed return, it can be done now, within 2 years from the end of the relevant assessment year. The intention is to allow taxpayers an opportunity to pay any unpaid taxes without severe consequences, in case they have made a mistake at the time of filing and return is already processed.”
Sitharaman said that as India is growing at a fast pace economically people perform multiple transactions and there may be some taxpayers who might have missed correctly estimating their income for tax payments even though the system by income tax department is very robust. Hence, the government is giving an opportunity to those taxpayers to update their omitted income.
Further, Sitharaman said that the government has decided to reduce the corporate surcharge from 12% to 7%. Additionally, both Centre and States govt employees’ tax deduction limit will be increased from 10% to 14% to help the social security benefits of state govt employees and bring them at par with the central govt employees.
The Finance Minister also proposed to provide that any income from the transfer of any virtual digital asset shall be taxed at the rate of 30%. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition, she added.