Finance Minister (FM) Nirmala Sitharaman on Tuesday said that the government will provide a one-time window for taxpayers to correct omissions in their income tax returns (ITRs), which has been a source of concern for them.
She stated in her budget speech that the updated returns must be filed within two years.
“To provide an opportunity to correct an error, taxpayers can now file an updated return, on payment of additional tax, within two years from the end of the relevant assessment year (AY),” Ms Sitharaman said.
The finance minister stated that the income tax department has established a robust framework for reporting taxpayers’ transactions, highlighting India’s rapid growth and the fact that people are engaging in multiple financial transactions.
“In this context, some taxpayers may realize that they have committed omissions or mistakes in, correctly estimating their income for tax payment,” she said as she announced the reform in the direct tax regime.
Ms Sitharaman further said that filing an updated return is an “affirmative step in the direction of voluntary compliance.”