Finance Minister Nirmala Sitharaman said in her Budget 2022 speech that the government has further simplified the tax system. She announced new updated returns rules. Taxpayers can now file an updated return within 2 years of the filed IT return of an assessment year. Taxpayers can, in this manner, file returns that they might have missed earlier.
"To provide an opportunity to correct an error, taxpayers can now file an updated return within two years from the relevant assessment year," said FM Sitharaman.
Experts believe that this will prove to be a welcome move going ahead. Gouri Puri, Partner, Shardul Amarchand Mangaldas said, "Giving taxpayers an opportunity to file an updated tax return to report any income that was erroneously missed out or to correct errors is a much-awaited tax reform. Earlier, if a taxpayer missed the due date to file a revised return, there was no mechanism in law to self-report any income that was not offered to tax, leaving the taxpayer vulnerable to litigation, interest and penalties even when there was an intent to disclose income. This reform should go a long way in reducing tax disputes and building trust between the taxpayer and the government."
"We have deeply realised the benefit of the latest provisions for the taxpayer community. The updated return filing provision is much better than the previous with the time bracket of two years,” said Amit Gupta, MD, SAG Infotech.
Sitharaman also announced that the tax on cooperative societies will be reduced to 15 per cent to provide a level playing field between cooperatives and corporates and added that the government employees' tax deduction limit for both Centre and state employees will be increased from 10 per cent to 14 per cent.
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