Finance Minister Nirmala Sitharaman on Tuesday while announcing the Budget said that citizens can now file updated returns within two years of the end of the relevant assessment year.
The measure was particularly formulated to allow taxpayers to correct any omission or mistakes made while estimating their tax.
Sitharaman said that currently if the Income Tax Department came across erroneous estimates by a taxpayer, it went through a lengthy process of adjudication. The minister added that the new process puts trust in the taxpayer.
“It is an affirmative step in the direction of voluntary tax compliance,” she said.
Sitharaman said that the Income Tax Department had an efficient mechanism to report taxpayers’ transactions, NDTV reported.
“In this context, some taxpayers may realise that they have committed omissions or mistakes in correctly estimating their income for tax payment,” she said.
Meanwhile, the minister did not announce any change in personal income tax slabs despite the elevated inflation levels and impact of the Covid-19 pandemic on the middle class.
Also, Sitharaman said that the government proposed to reduce the minimum alternative tax for cooperatives from 18.5% to 15% and reduce co-operative surcharge from 12% to 7%.
She also announced that digital assets will be taxed 30% without any deduction. Sitharaman proposed that to capture the transaction details of virtual assets, a TDS (tax deducted at source) will be levied.
Surcharge on the transfer of any long-term capital gains will be capped at 15%, the finance minister said. She mentioned that gifts of virtual assets will be taxed at the receiver’s end.