*CBDT adds four new criteria for filing ITR – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/todays-paper/tp-economy/cbdt-adds-four-new-criteria-for-filing-itr/article65344836.ece

New norms have been defined at a time when there is much debate about the low number of tax payers in the country

New norms have been defined at a time when there is much debate about the low number of tax payers in the country | Photo Credit: lakshmiprasad S

Measure aims to boost return filers and reduce tax non-compliance, evasion

Individuals paying ₹25,000 as Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) or who have total deposits in saving bank accounts of ₹50 lakh or more will now be required to file an Income Tax Return (ITR) even if their gross income is less than or equal to exempted income. 

These are two among the four new criteria added by the Income Tax Department to the rules for filing ITR. Through a notification dated April 21, a new rule (12AB) was added to the Income Tax Rules, 1962. Accordingly, four new conditions for submitting returns by a person have been established.

“if his total sales, turnover or gross receipts in the business exceeded ₹60 lakh during the previous year, or if his total gross receipts in profession exceeded ₹10 lakh, or if the aggregate of tax deducted at source (TDS) and tax collected at source (TCS), is ₹25,000 or more, or if the person’s deposit in one or more savings bank accounts was ₹50 lakh or more during the previous year,” the new rule states.

There are already similar conditions exist. According to Aakanksha Goel, Direct Tax Partner at TR Chadha & Co, Finance Act, 2019 added a seventh proviso to Section 139 that required the filing of income-tax returns upon if certain criteria were met , such as deposition of ₹1 crore or more in current account, expenditure exceeding ₹2 lakh for foreign travel or an amount exceeding ₹1 lakh for electricity consumption during the year. Four new norms have now been added.

“Such norms will catch all assessees incurring high value transactions but do not file income tax returns because their taxable income is less than the basic exemption limit. The number of income tax returns filed in the country can be expected to rise, and we can expect greater transparency in the system,” she said.

Sujit Bangar, Founder, Taxbuddy.com, believes that these are very stringent measures and that many taxpayers will be required to file ITRs even with income less than prescribed limit.

According to Shashi Mathews, Partner with IndusLaw, the apparent objective of power being exercised is to reduce tax non-compliance and tax evasion, and to bring a large section of adult population within the tax ambit, as most people in India do not file returns.

“This mandate applies to all individuals other than companies or firms, regardless of whether their total income exceeds the taxable threshold. As a measure of relief for senior citizens from this compliance, the TDS and TCS threshold limit is prescribed as ₹50,000 instead of ₹25,000,” he said.

New norms have been defined at a time when there is much debate about the low number of tax payers in the country. Finance Minister Nirmala Sithramanan recently informed the Rajya Sabha that total number of taxpayers for AY 2020-21 (Fiscal Year 2019-2) was more than 8.22 crore in a population of over 136 crore. Persons who pay income tax and corporate tax and have either filed a Return Of Income for the relevant A.Y. or in whose case tax has been deducted at source in the relevant F.Y. but the taxpayer has not filed the ITR are considered tax payers.  

Published on April 22, 2022


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s