With the concerns of the period of reassessment and reopening of income tax file, finance minister Nirmala Sitharaman in budget 2024 has simplified such provisions.
Sitharaman has suggested that an income tax assessment window can be reopened beyond three years from the end of the assessment year if the income which is not disclosed during filing returns is ₹50 lakh or more. The government has also introduced a limit of opening the re-assessment of income tax file for up to a maximum period of five years from the end of the assessment year.
In her budget speech finance minister Nirmala Sitharaman said ,“I propose to thoroughly simplify the provisions for reopening and reassessment. An assessment hereinafter can be reopened beyond three years from the end of the assessment year only if the escaped income is ₹ 50 lakh or more, up to a maximum period of five years from the end of the assessment year.”
The finance minister has also revised the time limit in search cases to six years from ten years previously. This aims to lower uncertainties and disputes.
“Even in search cases, a time limit of six years before the year of search, as against the existing time limit of ten years, is proposed. This will reduce tax-uncertainty and disputes,” Finance Minister Nirmala Sitharaman said.
In a move to reduce tax litigation and disputes, the finance minister has proposed to simplify the Income Tax Act,1961 to make it concise and easy to read. According to the finance minister, the simplification of the Income Tax Act,1961, will provide tax certainty to taxpayers and will reduce the demand for litigation. The proposed changes to the Act will be completed in six months.
Additionally, finance minister has also changed income tax slabs and revised the limit for standard deduction to ₹75,000 from ₹50,000.
