The recent provision permitting the assessee to update their tax return would be seen nearly 5 lakh re-filing with approximately Rs 400 cr additional tax incurred.
A new concept has been made for the updated returns by the Finance act of 2022 allowing the assessee to update their Income tax returns within 2 years of filing as per the tax payments.
In the month of May current year, a new form ITR-U would be made available for the assessee so as to update their ITRs with any income or earnings that might get overlooked in the original filings for fiscal years starting 2019-20 (the assessment year 2020-21).
“So far about 5 lakh updated ITRs have been filed and about Rs 400 crore taxes have been paid,” he articulated.
The official mentioned that the compliance would have been rectified substantially and the corporates would furnish the updated Income tax return.
“Data showed that one company has filed an updated return and the amount of tax paid is ₹1 crore. This shows that there is voluntary compliance now and people want to pay tax and stay clean,” he counted.
Rectifying Omissions and Discrepancies
The assessee would file the same form within 2 years of the finish of the related assessment year and would need to provide the reasons to update the income return earlier not furnished or income not being reported in a correct way or incorrect heads of income opted or reduction of the loss which is carried forward.
The reason provided in the form would comprise the reduction of the unabsorbed depreciation or the tax credit reduction under section 115JB/115JC or wrong rate of tax or any additional reasons provided by the assessee.
Budget 2022-23 would allow the assessee to update their Income tax returns within 2 years of filing, as per the tax payment a procedure whose purpose is to assist with any discrepancy or omissions.
An assessee is allowed to furnish one updated return per assessment year. It is expected by the government that the collection through direct taxes (personal and corporate tax) to be more than the estimated budget of Rs 14.20 lakh cr by Rs 3.30 lakh cr.
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