‘Updated Income Tax returns’ - Budget 2022

New Provision for filing ‘Updated Income Tax returns’ within 2 years from end of relevant AY

Considering the Income Tax Department powerful framework of reporting of taxpayers' transactions some taxpayers may realize that they have committed omissions or mistakes in correctly estimating their income for tax payment.

To provide an opportunity to correct such errors, as, proposed 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.

Presently, if the department finds out that some income has been missed out by the assessee, it goes through a lengthy process of adjudication. Instead, with this proposal now, there will be a trust seeded in the taxpayers that will enable the assessee themselves to declare the income that they may have missed out earlier while filing return.

It is an affirmative step in the direction of voluntary tax compliance.

Litigation management to avoid repetitive appeals by the Department

As observed that heap lot of time and resources are used in filing of appeals which involve identical issues. Taking forward our policy of sound litigation management, proposal to provide that, if a question of law in the case of an assessee is identical to a question of law which is pending in appeal before the jurisdictional High Court or the Supreme Court in any case, the filing of further appeal in the case of this assessee by the department shall be deferred till such question of law is decided by the jurisdictional High Court or the Supreme Court.

This will greatly help in minimizing repeated litigation between taxpayers and the department.