Maximizing Tax Benefits: Importance of Updating ITRs
Understanding the CBDT’s E-Verification Scheme
As a professional in the field of taxation, it is important to be aware of the recent press statement issued (Dt.14 Mar 2023) by the Central Board of Direct Taxation (CBDT) regarding the e-verification scheme. The IT department has identified 68,000 cases of under-reporting or non-reporting of income in the annual returns and has initiated e-verification for these cases. The purpose of this exercise is to help taxpayers update their returns within the stipulated three-year window and reduce the chances of litigation.
Ensuring Accurate Income Tax Filings Through Regular AIS Monitoring and Reporting
It is essential for taxpayers to view their Annual Information Statement (AIS) regularly and report any discrepancies or mismatches to the department. This e-verification scheme is a non-intrusive way to encourage taxpayers to file updated returns in case of any mismatch. It is a transparent process without any human interface and promotes voluntary compliance.
Streamlining Income Tax Filings: How the Risk Management System Benefits Taxpayers
The risk management system used by the tax department to identify cases for e-verification is based on certain parameters. The cases are selected for verification by matching the data in the AIS on transactions with the returns filed. So far, the department has received 15 lakh updated returns and collected Rs 1,250 crore as tax.
Mitigating Risks and Avoiding Litigation: The Importance of Promptly Updating Income Tax Filings
If there is any mismatch in the AIS and ITR, taxpayers should take prompt action and file updated returns. By doing so, they can avoid the risk of their case being picked up for scrutiny or re-assessment. This will not only save them from litigation but also help in reducing the burden of unnecessary tax disputes.
Extended Deadline for ITR Update: Maximizing Benefits for Taxpayers
It is important to note that the CBDT has allowed taxpayers to update their Income Tax Returns (ITR) for the financial year 2019-20 until 31st March 2023, and for FY 2020-21 and FY 2021-22 until the end of the two years of the relevant financial year. This provides taxpayers with ample time to review and update their returns in case of any discrepancies or errors.
Rectifying Past Mistakes: Filing for Condonation Letter
In cases where taxpayers have missed filing their returns for previous financial years (before FY 2019-20), they need to submit a condonation letter to the Income Tax Officer (ITO). The letter should explain the reasons for not filing the return and provide any other relevant details as per the instructions of the Central Board of Direct Taxes (CBDT).
After submitting the condonation letter, the ITO will review the case and may allow the taxpayer to file revised or rectified returns for the relevant financial years. It is important to note that the process of condonation may involve additional documentation and fees, and the final decision rests with the ITO.
Moreover, the CBDT has also launched an AIS app for Android devices, which taxpayers can download and use to review their financial transactions and compare them with the ITR filed. This app provides an easy and convenient way for taxpayers to monitor their financial transactions and ensure that their returns are up to date.
Benefits of Filing Revised or Rectified Returns for Taxpayers
Filing revised or rectified returns for the relevant financial years can benefit taxpayers in several ways. Firstly, it can help taxpayers avoid legal repercussions for non-compliance with tax regulations. Secondly, by updating their returns, taxpayers can ensure that they are paying the correct amount of tax and avoid any potential discrepancies or errors. This can also help reduce the risk of scrutiny or re-assessment by the Income Tax Department.
Moreover, the extended timeline provided by the CBDT for updating ITRs provides taxpayers with ample time to review and update their returns. This can help taxpayers avoid the last-minute rush and ensure that their returns are accurate and up to date.
In conclusion, as a leading tax consultancy firm, we would advise taxpayers to stay vigilant and regularly monitor their AIS to avoid any discrepancies in their returns. If they notice any mismatch, they should immediately report it to the department and take necessary action. Our team of experienced professionals at Team IN Filings is always ready to assist taxpayers in resolving any tax-related issues and provide them with timely guidance
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