Rule 86B Income Tax paid more than one lakh in updated return under Section 189(8A)

[DILEEP SINGH]

Dear Sir(s)/Madam (s)

One taxpayer has paid Income Tax less than one lakh in F.Y. 2020-21. Thereafter, he updated his return in the month of March, 2023. In updated return he paid income tax more than one lakh. In F.Y. 2021-22 he has already paid Income Tax more than one lakh in original returns. Now my question is :-

(1) Can he avail benefit of exemption from 86B as per restriction (Income Tax payment) during the F.Y. 2022-23?

 

[Yash Shah]

As per clause (a) of the first proviso of rule 86B read with section 49(4) of the CGST act, the restriction shall not apply to said person or the proprietor or karta or the managing director or any of its two partners, whole-time directors, member of managing committee of associations as the case may be have paid more than 1 lakh rupees under Income tax act in each of two financial year for which the time limit to file return of income under subsection (1) of section 139 of said act has expired.

As per the analysis of rule 86B, it is inferred that there should be a payment of rupees 1 lakh in the financial year not for the financial year  As in our case payment of Rs 1 lakh is made in the financial year 22-23 for the F.Y.20-21. While conditions state that the income tax paid more than 1 lakh in each of the two financial years for which the time limit to file a return of income tax u/s 139(1) has expired.

Hence, we can not avail of the benefit of exemption from restriction in FY 2022-23 as income tax was not paid more than 1 lakh in FY2020-21.

[Shilpi Jain]

WHat is the constitution of the taxpayer? Individual, company, partnership....?

AI Summary

Taxpayer Ineligible for Rule 86B Exemption in 2022-23 Due to Late 2020-21 Payment Update Under CGST Act Section 49(4) A taxpayer updated their income tax return for the financial year 2020-21 in March 2023, resulting in a tax payment exceeding one lakh rupees. They had also paid over one lakh in the original return for 2021-22. The query concerns eligibility for exemption from Rule 86B restrictions for 2022-23. A response clarified that under Rule 86B and Section 49(4) of the CGST Act, the exemption requires payment of over one lakh in each of two financial years for which the return filing deadline has expired. Since the 2020-21 payment was updated later, the exemption cannot be availed for 2022-23.