Offering a sense of relief to taxpayers, Union Finance and Corporate Affairs Minister Nirmala Sitharaman in Budget 2024 announced a number of key changes with regards to reopening and reassessment of old income tax returns (ITR) filed by taxpayers.
In Budget 2024, Finance Minister Nirmala Sitharaman proposed that reopening and reassessment of income tax returns will be allowed in cases beyond three years only when the income in dispute is ₹50 lakh or more. The time period of three years will be calculated from the end of the assessment year.
Also, the reopening is permitted up to a maximum period of five years from the end of the assessment year.
I-T search cases
Besides reopening and reassessment, a change has been made with regards to search cases wherein a time limit of six years before the year of search is proposed against 10 years which existed earlier.
In the Budget speech, the finance minister argued that this move would reduce uncertainty and disputes.
More officers
The FM also said that the government plans to deploy more officers to hear and decide such appeals, particularly those with large tax effects.
The government has raised monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunal, High Courts and Supreme Court to ₹60 lakh, ₹2 crore and ₹5 crore, respectively.
In addition, Finance Minister Sitharaman also announced Vivad Se Vishwas Scheme, 2024 for resolution of certain income tax disputes pending in appeal.
Cut down on litigation
She also emphasised on the efforts being made by the government to improve taxpayer services and cut down on litigation (i.e. court battles between taxpayers and income tax department).
Ms Sitharaman also announced a comprehensive review of the I-T Act to make the legislation easy to read and understand, which — she asserted — will help in reducing disputes and litigation.
“It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months,” she said during the Budget.