Forgot it ...then fix it! Tax payers get 2 years to report 'overlooked' income

Forgot it, now file it later: The FM in a hope to increase compliance and reduce litigation, is giving tax payers a chance to to disclose or rather update all taxable income. The budget announced a new 2-year window for assessees to file an 'updated' return if any income was overlooked or missed while filing tax returns.

When reporting such additional income, the taxpayer would also be required to pay additional tax at the rate of 25% if the updated return is filed between one to 12 months or 50% on the additional tax if the updated return is filed between 13 to 24 months from the end of relevant assessment year but before the commencement of proceedings.

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The updated return cannot be filed to report additional loss or decrease in the tax liability. The tax is required to be paid before the filing of the updated tax return and the proof to that extent is required to be attached while filing updated return.

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This option will also be available to those who haven’t filed a tax return previously for the relevant assessment year. These changes will come into effect from April, 2022