65,000 ITRs filed within four months of launch: Tarun Bajaj

Within four months of the introduction of the updated return scheme, over 65,000 income tax returns (ITR) have been filed, according to a senior official. At the same time, work is being done to make normal reporting easier from the next assessment year by adding new functions.

“We have seen a large number of updated returns for the last two assessment years (AY 2020-21 and 2021-22) filed till date,” said Revenue Minister Tarun Bajaj.

How it works

The scheme is available to those who have already filed tax returns as well as those who have not filed at all. It can be submitted with 25 per cent. tax and interest if an updated declaration is submitted in the first year and 50 per cent tax and interest in the second year.

The scheme aims to help assessees who, after filing the tax return, may realize that they have omitted something or made a mistake in estimating their taxable income. Now she can submit updated reports against payment of additional tax/interest. This can be filed within two years from the end of the relevant assessment year. For AY 2020-21, one can file until the end of AY 2022-23.

Cuts off lawsuits

Currently, if the tax department detects lost income from the tax authority, it goes through a lengthy assessment process. Instead, with this proposal, the department will have confidence in the assessor’s statement about the missing income in the previous application. The government says it is an affirmative step towards voluntary tax compliance.

So far, the Act has provided an additional time of five months to an individual assessee, two months to a company/audit case and one month to an assessee involved in an international transaction or specified domestic transactions to file delayed or revised returns.

The explanatory provision in the Finance Bill, 2022 states: “This additional timeline for filing a revised/delayed return may not be sufficient when we consider the utilization of vast information and available data coupled with the ‘nudge approach’ that motivates the taxpayer to the desired goal of voluntary tax compliance, starting with filing correct tax returns.”

More time

The new scheme for updated returns therefore gives the assessors more time. On the one hand, this would bring the use of huge data with the IT department to a logical conclusion, resulting in additional revenue realization, and on the other hand, it would make it easier for taxpayers to comply with the rules in a litigation-free environment.

More changes in ITR form

Bajaj said that based on feedback and experiences on ITRs filed this year, efforts would be made to make the process easier next year. “AIS (Annual Information Statement) gives us more data. So if there is information that a person has no capital gain, he will not be required to open the page for that in the pre-filled return,” he said, adding that this will further facilitate the process of filing returns.More such processes will also be considered in due course.

Published it

4 August 2022