Review of TDS/TCS Amendments in Budget 2025
Review of TDS/TCS Amendments in Budget 2025 Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) provisions are integral to the tax system, ensuring tax collection at the source of…
- Have any questions?
Reassessment proceedings For Income Escaping Assessment- Key Modifications & Modalities As Per Budget 2024
Decoding Section 148A
Section 148A of the Income Tax Act empowers Income Tax officers to initiate reassessment proceedings if they suspect that a taxpayer may have concealed income in any assessment year. This section ensures that taxpayers are given an opportunity to present their case before any reassessment notice is issued.
Current Framework
Under the existing provisions, the Income Tax Department can reopen assessments for up to 10 years (or 11 financial years) if the income involved exceeds Rs 50 lakh. For incomes below this threshold, the limit is set at three years (or four financial years). However, there are recent changes proposed in the Finance Bill 2024.
Changes Introduced in Budget 2024
The Finance Bill 2024 introduces significant amendments to Section 148A, particularly concerning the time limits for issuing notices related to reassessment:
Reduced Time Limit for High Income Cases: The time limit for issuing notices under Section 148A for income escaping assessment of Rs 50 lakh or more is reduced from 10 years to 5 years (or 6 financial years). This change aims to streamline the reassessment process and reduce the duration for which old assessments can be reopened.
- Continued Time Limit for Lower Income Cases: The time limit remains unchanged for cases involving income below Rs 50 lakh, which continues to be three years.
- New Deadlines: For the Assessment Year (AY) 2018–19, where income escaping assessment is Rs 50 lakh or more, the deadline for issuing a notice under Section 148 or an order under Section 148A is set as August 31, 2024. Notices must be issued within the specified timeframe, with reassessment proceedings required to follow a structured process.
- Implementation Date: These changes will come into effect from September 1, 2024. Hence, any assessments for AY 2018–19 will be considered time-barred after this date.
ALTERED CRITERIA
Existing provisions | Proposed limits | ||
Quantum of Income | Section 148 | Section 148 | Section 148A |
Normal case (Escaped income <₹50 lakh) | Within 3 years from end of AY | Within 3 years from end of AY | Within 3 years 3 months from end of AY |
Specified case (Escaped income > = ₹50 lakh) | Within 10 years from end of AY | Within 5 years from end of AY | Within 5 years 3 months from end of AY |
Key Points to Note
- Verify Timeliness: Upon receiving a Section 148A notice, taxpayers should verify whether the notice was issued within the new prescribed timeframe.
- Evidence Requirement: The notice must detail the incriminating evidence or information that led to its issuance. Furthermore, notices should be issued by the National Faceless Appeal Centre (NFAC) rather than the jurisdictional assessing officer.
The amendments introduced in Budget 2024 aim to refine and expedite the reassessment process under Section 148A. Taxpayers should stay informed about these changes to ensure compliance and timely responses to any reassessment notices they receive.
Related Post
Income Tax Update: ITR-U Filing Deadline Extended to 48 Months
Income Tax Update: ITR-U Filing Deadline Extended to 48 Months The Indian government has extended the deadline for filing updated income tax returns (ITR-U) from 24 months to 48 months. This change,…
Union Budget 2025: Key Tax, GST & MSME Updates Explained
Union Budget 2025: Key Tax, GST & MSME Updates Explained The Union Budget 2025 introduces significant updates impacting income tax, GST, and MSMEs, aiming to simplify compliance, boost economic activity, and ease…
Book A One To One Consultation Now For FREE
How can we help? *