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.
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.
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.
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 |
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.
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