Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining to Financial Year 2024-25 onward [ Section 74A ]

Section 74A: Handling Tax Discrepancies and Penalties from 2024-25; Voluntary Payments Reduce Penalties; Orders Issued Within 12-18 Months.

Section 74A addresses the determination and recovery of unpaid, short-paid, or erroneously refunded taxes, and wrongly availed or utilized input tax credits from the financial year 2024-25 onwards. A show cause notice is issued if the tax discrepancy exceeds 1,000, within 42 months of the relevant financial year. Penalties vary based on the nature of the discrepancy, with higher penalties for fraud. Taxpayers can voluntarily pay taxes with reduced penalties before or after notice issuance. The proper officer must issue an order within 12 months of the notice, extendable by six months. Proceedings exclude Section 132 actions.