Finance Minister Nirmala Sitharaman has announced Union Budget on Tuesday and there has been no change in income tax slab rates. She addressed this point while giving her speech in the Parliament. She has also given relief in doing changes in ITR filing for up to two years from assessment year. This is applicable in case of less filing of tax.
Sitharaman in her speech said, “To provide an opportunity to correct such errors, I am proposing a new provision permitting taxpayers to file an updated return on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year.”
According to Budget Memorandum, “It is proposed that an amount equal to 25 per cent or 50 per cent as additional tax on the tax and interest due on the additional income furnished would be required to be paid.”
Expert Opinion In ITR Filing
Expert on Taxation Balwant Jain said, “This offer does not come cheap. Those who wish to come clean have to pay an extra amount expressed in percentage terms of tax and interest payable at the time of furnishing the ITR if the updated ITR is furnished within 12 months (25%) or after 12 months but within 24 months (50%).”
Annual Information Return has been introduced and it has caused uneasiness. It is a trouble for those people who have been evading on paying full tax to the government.
Mr. Jain added, “Since the government does not have the requisite bandwidth to track and chase the taxpayers who have not fully declared their income or have not filed their ITR where the tax impact is not very significant, it has come out with a novel idea to offer the taxpayer the chance to come clean on their own but with certain additional cost by uploading an updated ITR by paying the tax within two years from the end of the assessment year before the income tax departments find it out.”
The taxpayers should note that updated return policy is not for updating losses and decrease in tax liability. You need to pay your tax before filing updated tax return. Proof of extent should be attached while filing updated ITR.
As per the Budget memorandum, a new provision in section 139 of the I-T Act is being introduced for filing an updated return of income by any person, whether he has filed a return previously for the relevant assessment year, or not.