Are you eligible for the new change in income tax rules in Budget 2022? Check here

Are you eligible for the new ITR update rule? Check here

New Delhi: In great relief for taxpayers, the Minister of Finance Nirmala Sitharaman announced an extension to update the 2-year ITRs from the existing 3 months from the end of the relevant assessment year. However, the service will not be available to all taxpayers.

To rectify any errors on their RTI form, taxpayers would have to pay an additional 25-50% tax on interest tax, as proposed in the 2022 budget. While this decision will benefit individual taxpayers who missed the deadline to file a back updated, a closer examination of the budget documents highlighted that not all individuals can benefit from the facility.

Individual taxpayers will not be eligible for this facility if the updated return results in a decrease in total tax payable or an income tax refund or increase in income tax refunds for the latest return of income filed (original/filed).

The ITR for any year pending assessment or reassessment or recalculation or revenue review by IT or completed, will also not be eligible for update.

Proposed subsection (8A) of section 139 does not apply if the updated statement is a statement of loss or has the effect of reducing the total tax payable determined on the basis of the statement provided in under subsection (1), subsection (4) or subsection (5) or results in a refund or increases the refund due on the basis of the statement provided under subsection (1), subsection (4) or subsection (5), of that person under the Act for the relevant taxation year.

A person is not permitted to provide an updated statement under proposed subsection (8A) of section 139, if:-

(A) the search was initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A in the case of that person, or

(B) an investigation has been conducted under section 133A, other than subsection (2A) of that section, in the event that such person, or

(VS) a notice has been issued to the effect that any sum of money, bullion, jewel or article or thing of value seized or requisitioned under section 132 or section 132A in the case of any other person belongs to that person, or

(D) notice has been issued to the effect that any book of account or document, seized or requisitioned under section 132 or section 132A in the case of any other person, relates or relates to, or any other information they contain, relates to that person.

This provision applies to the assessment year corresponding to the preceding year in which such research is initiated or an investigation is conducted or a request is made and two assessment years preceding this assessment year.

(iv) In addition, no updated return need be provided by a person for the relevant tax year, where,

(A) an updated return has been provided by him under proposed subsection (8A) of section 139 of the Act for the relevant taxation year, or

(B) an assessment or reassessment or income recalculation or review proceeding under the Act is in progress or has been completed for the relevant assessment year in his case, or

(VS) the valuation agent has information in respect of that person for the relevant tax year in its possession under the Prevention of Money Laundering Act 2002 or the Black Money Act 2015 ( undisclosed foreign income and assets) and on the imposition of tax or prohibition of Benami Property Transactions Act, 1988 or The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 and the same was brought upon him disclosed, prior to the filing date of its statement under proposed subsection (8A) of section 139 of the Act, or

(D) information for the relevant assessment was received under an agreement referred to in section 90 or 90A of the Act in respect of that person and that it was communicated to him, before the date of filing of his return in under proposed subsection (8A) of section 139 of the Act, or

(E) any proceedings under Chapter XXII have been commenced for the relevant taxation year in respect of such person, prior to the date of filing of his return under proposed subsection (8A) of Section 139 of the law, or

(F) he is a person or belongs to a category of persons, as notified by the Régie in this regard.

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