The Central Board of Direct Taxes (CBDT) recently issued a circular on the application for condonation of delay in filing ITR. Income taxpayers often file this application requesting the tax department to condone delay in filing/revising ITR in order to claim income tax refund and carry forward of losses and set off. This condonation of delay application allows them to file an income tax return (ITR) to claim past tax refund and/or claim carry-forward of loss and set-off in cases where the due date for filing tax return is long past.

The latest circular has reduced the time limit to apply for condonation of delay to five years from the end of the financial year in which the ITR was actually required to be filed. The earlier 2015 circular allowed taxpayers to file the condonation delay application within six years from the end of the financial year in which the ITR was required to be filed.

Hence, taxpayers will get one year less to file delay condonation requests to apply for old income tax refunds. CBDT issued the circular on October 1, 2024.

The government will exceed the Rs 22.07 trillion direct tax collection target set for the current fiscal, Central Board of Direct Taxes (CBDT) chairman Ravi Agarwal said on Monday.

Agarwal also said that taxpayers who have not disclosed their foreign income or assets in their ITRs have time till December 31 to file their revised return for the 2023-24 fiscal. The tax department is in the process of sending SMS and emails to those assessees who have not disclosed high-value assets.

Inaugurating the Taxpayers Lounge at the India International Trade Fair (IITF), Agarwal also said that more than 6,000 suggestions have come in for a review of the income tax law to make the language simple and easy to understand.

"We are hopeful and we believe that we will exceed the budget target for tax collection. Collections from corporate and non-corporate taxes have risen," Agarwal told reporters here.

In an explicit nudge to taxpayers citing compliance with global disclosure norms, the Income Tax Department has urged them to disclose details of foreign assets and income correctly in their income tax returns and file revised returns by December 31, if there is a requirement to update the information.

The Department, it is learnt, will also begin an e-campaign in the next few days to facilitate filing of details of foreign assets and income by taxpayers, a government official said.

The campaign is being launched with the aim to reach out to those taxpayers who have not disclosed details of their foreign income and assets correctly in their income tax returns but the tax department has received information about them through various information-gathering and sharing agreements of India with other countries, an official said. “There is substantial information being received from other countries about ownership of foreign income and assets. This campaign will provide a window to taxpayers to disclose their information of foreign income and assets correctly in their income tax returns,” the official said.

All landowners who had cut 'joint development' deals with builders are under the lens for skirting tax on capital gains.

The investigation wings of the Income Tax (I-T) department across the country have been told by the central direct tax body to collect information on agreements where individuals and Hindu Undivided Families (HUFs) had struck a deal with developers but may not have paid tax even after the buildings received 'completion or occupation certificates' (CC/OCs).

CC/OCs are typically issued by municipal authorities of states once the construction is complete and the projects are in a ready-to-move-in state.
In a communique towards end-October, all director generals of I-T investigation wings in several cities were asked by the Central Board of Direct Taxes (CBDT) to fish out data on properties that were given CCs or OCs during the financial years 2020-21, 2021-22, and 2022-23, a source told ET.

Over 75 lakh updated income tax returns have been filed by July 31 this fiscal helping tax authorities mobilise as much as Rs 8,000 crore in additional revenue.

According to official sources, taxpayers have used the facility of updated returns to both update returns based on additional information and pay taxes, as well as to file returns in cases where no returns had been filed previously. The returns pertain to the Assessment Year 2021-22 and 2022-23.

“Nearly 90% of the updated returns filed by July 31 this year were by non-filers,” official sources said, adding that this reflects improved compliance by taxpayers.

Under the facility of filing updated returns, which was introduced in the Union Budget 2022-23, taxpayers can resubmit income tax returns in case of any error or additional information and pay the necessary taxes. This updated return can be filed within two years from the end of the relevant assessment year. A penalty is also imposed on the additional tax amount.

The Income Tax Department has issued notices to several taxpayers who have claimed disproportionate refunds, according to people with knowledge of the matter. The department has raised concerns over the rising number of suspicious tax returns and refund claims, particularly from unscrupulous individuals, the people said.

The Department has targeted chartered accountants and agencies that promise large refunds, often using fraudulent means, the people quoted above told NDTV Profit, adding that many of the refund claims involve bogus expenses, disability, and medical claims.

The notices have been issued for the assessment years 2021-22 and 2022-23, covering taxpayers across the country, said the people.

Major cases have been reported in cities like Gurugram, Ghaziabad, Mumbai, and Bengaluru, said the people, adding that the Income Tax Department is closely monitoring large tax refund claims, particularly those coming from a single CA or agency and strict action against CAs and agencies that misguide taxpayers into claiming incorrect refunds.

The deadline for filing the income tax return (ITR) for FY 2023-24 is November 15, 2024, for those taxpayers subject to an income tax audit and other designated taxpayers. If you're hoping for an extension of this deadline, it's important to note that this is already an extended deadline, as the original deadline was October 31, 2024. To date, there has been no announcement regarding any further extensions to this revised deadline, making it unlikely that the government will decide to push it back again under the current circumstances.

What do you need to do before filing ITR by November 15, 2024
The process of filing your ITR is closely tied to the submission of a tax audit report. Experts emphasize that the details provided in the tax audit report must be referenced in the ITR, highlighting the interconnected nature of the two. Therefore, it's essential to submit your tax audit report prior to filing your ITR.

According to Chartered Accountant Prakash Hegde, "The taxpayer liable for income tax audit has to give the details of the tax audit in his ITR (including the date of furnishing audit report, acknowledgement number of audit report etc.). Unless the tax audit report is submitted, these details cannot be filled in the ITR. Therefore, filing a tax audit should precede filing the ITR of the taxpayer."

The Indian government's net direct tax collection grew 15.4 per cent year on year to Rs 12.1 trillion ($143 billion) during the period April 1-Nov. 10, according to a statement.

Direct taxes, which include corporate and personal tax, grew over 21 per cent to Rs 15 trillion on a gross basis during the period, the statement issued by the income tax department said.

The government said it had issued tax refunds of Rs 2.9 trillion.

Many high-net-worth individuals who allegedly own undeclared properties in Dubai have received notices from the tax office. Buyers must comply with the Foreign Exchange Management Act (FEMA) and the Income-Tax Act when buying property abroad.

“As the United Arab Emirates is a tax-free zone, black money is often routed through hawala to Dubai, then banked and invested in property. Cash deposits in Dubai bank accounts are not scrutinised for tax implications as they are in India. However, if the sender is a resident Indian, the source of funds could be questioned in India,” says Vivek Jalan, partner, Tax Connect Advisory Services.

Remittance and purchase

A resident Indian can acquire property abroad by remitting funds through the Liberalised Remittance Scheme (LRS) route. “Under LRS, all resident individuals, including minors, may remit up to $250,000 per financial year for permissible transactions, including buying property abroad. In the case of minors, the LRS declaration should be signed by the natural guardian,” says Shefali Mudra, tax expert, ClearTax.

The Karnataka High Court has allowed an appeal by the Income Tax Department against tax exemption allowed in certain land acquisition cases. The order, passed on October 29 by a division bench of the Dharwad Bench consisting of Justices Krishna S Dixit and Vijaykumar Patil, nevertheless noted a certain imbalance in the different laws regarding the benefits that the land losers were eligible for.

In this case, a previous high court judgment from April 2023 had granted relief from paying income tax for compensation of land acquisition, based on Section 96 of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Appealing this judgment before the division bench, the I-T Department argued that this could only be applied if the acquisition was made under the 2013 act itself and not through some other law, such as the Karnataka Highways Act.

On the other hand, the opposing side argued that when the 2013 Act was enacted, all the other competing laws were implied to have been repealed, among other arguments. The high court accepted the I-T Department’s appeal, striking down the earlier order.

The Central Board of Direct Taxes (CBDT) is weighing a revamp of official designations within the Income Tax Department to make the roles clearer to people and foster a more transparent image of the department.

The proposed restructuring focuses on updating the nomenclature of positions like the commissioner of income tax (CIT) and principal commissioner of income tax. The goal is to align the titles more accurately with the responsibilities of the officials, enhancing both internal clarity and relatability with external stakeholders.

According to a senior government official, a committee was set up to review CBDT’s organisational structure, especially the allocation of roles across divisions. The committee recently submitted its report, suggesting several modifications to how the designations are structured to better reflect actual responsibilities of the officials concerned.

Changes in CIT Titles

Officials holding titles such as commissioner of income tax (CIT) are involved in more specialised tasks under the CBDT’s oversight. Since many of these officials handle policy and technical aspects, rather than direct tax-related work, the committee proposed that they be titled simply as commissioners. For instance, a CIT involved in technical and policy work may be renamed commissioner (tech and policy).

In a development that could allay the rising concerns regarding the increase in tax notices from the department, the Central Board of Direct Taxes (CBDT) is considering a structural reform which will separate the role of investigation and assessment in income-tax (I-T) evasion cases.

The CBDT is responsible for the tax administration in the country. In financial year 2024 , the depatment had sent 1 lakh notice.

Sources told Monyecontrol that this measure is being thought about after concerns rose about harsher assessments and potential bias.

This shift is expected to improve the fairness and efficiency of assessments. Currently, after investigation, the same officials carry out the assessment work. The proposal is to delegate assessment to what is called a central charge, rather than the investigation wing itself, which handles both the inquiry and assessment processes

The central charge refers to a specialised division within the I-T department that is responsible for handling assessments in specific types of cases, particularly those involving high-stakes tax evasion, search and seizure cases, and other complex tax matters.

The central board of direct taxes (CBDT) has set monetary limitations for waiver or Reduction of Interest on Tax Payments with riders.

According to the circular issued late night Monday, principal chief commissioners of Income Tax can waive up to Rs. 50 lakhs, chief commissioners or director generals of Income Tax can waive between Rs. 50 lakhs and Rs. 1.5 crores, and principal chief commissioners of Income Tax can waive interest above Rs. 1.5 crores.

The notification will be effective Tuesday.

The interest waiver or reduction will be considered if payment of the amount would cause genuine hardship to the taxpayer, or if default was due to circumstances beyond their control, the circular said.

Taxpayers must also co-operate in assessment or recovery proceedings, the circular added.

The department of revenue has set up 22 specialised sub-committees to review the income tax act.

Revenue secretary Sanjay Malhotra conveyed this at a meeting taken by union finance minister Nirmala Sitharaman to take stock of the progress of the review announced in the Budget. Sitharaman chaired the meeting Monday to assess the progress as the government is looking to introduce the draft bill in the budget session.

Apart from Malhotra, the meeting was attended Central Board of Direct Taxes Chairman Ravi Agarwal, and other senior CBDT officials The Department has also received 6,500 suggestion from the public, to simplify the IT law.

In her Budget speech on July 23, finance minister had proposed that the I-T law review will be completed in six months in January.

The review aims to make the law simple and taxpayer friendly.

The income tax department has notified the tolerance range for variation between arm's length price and transfer pricing for international and specified domestic transactions for Assessment Year 2024-25. The range has been retained at the same level as last year's -- one per cent for "wholesale trading" and three per cent for all other taxpayers, the Central Board of Direct Taxes (CBDT) said.

The term 'wholesale trading' will be defined as an international transaction or specified domestic transaction of trading in goods subject to certain conditions.

"The notification of tolerance range shall provide certainty to taxpayers and reduce the risk perception associated with the pricing of a transaction in transfer pricing," the CBDT said in a statement.
The 'tolerance range' means that if the arm's length price varies up to one per cent of the transaction price for wholesale trading and three per cent for other taxpayers, then the transaction price would be the arm's length price under the transfer pricing rules.

Under tax laws, transfer pricing refers to the pricing of the goods and services that are exchanged between related companies.

SBI Research in a report has advocated for quicker review of the Income Tax Act as announced in Budget 2024-25.

The report recommended that the revised Act be introduced as a money bill so that it can be passed within stipulated 75 days. This will not only simplify and streamline taxation process but also aligned with economic growth and inclusivity.

The report recommended raising the TDS threshold on bank interest payments from Rs 10,000 to at least Rs 100,000. Allowing annual issuance of TDS certificates (Form 16A) instead of quarterly, aligning it with Form 16 for salaries, since Form 26AS is primarily used for credit and a flat tax rate for individuals earning over Rs 8 lakhs, specifically for those aged 60 to 80, with additional provisions for individuals aged 80 and above.

Earlier this month, the Central Board of Direct Taxes (CBDT) has formed an internal committee to oversee a comprehensive review of the Income-tax Act, 1961 (Act), as was announced in the Union Budget 2024-25 by Finance Minister Nirmala Sitharaman.

The goal is to make the Act concise, clear, and easy to understand, which will reduce disputes, and litigation, and provide greater tax certainty to taxpayers.

The total number of income tax returns filers could exceed 90 million for assessment year 2024-25 (AY25) by the end of March 2025, a new report has said, while calling for a flat income tax rate for individuals earning over Rs 8 lakh, specifically targeting those aged between 60 and 80.

“For AY25, 7.3 crore (73 million) ITRs have been filed by the due date and another about 2 crore (20 million) returns are expected to be filed in the remaining financial year till March 25, thereby taking the total number close to or over 9 crore (90 million),” said a Research Report from the Economic Department of State Bank of India, titled How Tax Simplification has given a necessary fillip to ITR Filing.

How much tax do I have to pay? Calculate now

ITR filing has increased sharply over the years and stood at close to 86 million in AY24 as against 73 million in AY22, the report noted, adding that the number of returns filed after the due date is also declining in an indication of discipline among tax-payers along with the simplification of IT forms and processed.

With the government also undertaking a review of the Income Tax Act, 1961, that was announced in the Union Budget 2024-25, the report has also suggested several changes. It has called for switching from progressive taxation to a uniform taxation with a flat tax rate for individuals earning over Rs 8 lakh, specifically targeting those aged between 60 and 80, with additional provisions for individuals aged 80 and above.

The income tax department on Saturday extended the deadline for filing income tax returns by corporates by 15 days till November 15 for assessment year 2024-25.

In a circular, the Central Board of Direct Taxes (CBDT) said the deadline will be extended from the earlier target date of October 31.

The new deadline for Assessment Year 2024-25 (for furnishing tax returns for fiscal 2023-24) is November 15.

Nangia Andersen LLP Tax Partner Sandeep Jhunjhunwala said this extension would not apply to the Tax Audit Report, transfer pricing certification in Form 3CEB and other income tax forms like Form 10DA, for which the deadline would remain October 31, 2024.

AMRG & Associates Senior Partner Rajat Mohan said the CBDT's decision to extend the deadline for filing income tax returns for AY 2024-25, though not accompanied by an official explanation, seems aligned with the upcoming festive season.

"By extending the deadline to November 15, 2024, taxpayers and professionals alike can prioritise accuracy and compliance without the stress of last-minute filings amidst celebrations," Mohan said.

Direct tax collections have surged 182 per cent to over Rs 19.60 trillion in 2023-24 in the 10-year period of Prime Minister Narendra Modi-led government.

The latest 'Time Series Data' released by the income tax department showed that the corporate tax collections more than doubled to over Rs 9.11 trillion in 10 years to 2023-24 fiscal. Personal income tax mop up grew close to four-fold to Rs 10.45 trillion during the period.

In the first year of the Modi government in 2014-15, direct tax collection was about Rs 6.96 trillion. This included about Rs 4.29 trillion of corporate tax and Rs 2.66 trillion of personal income tax.

The number of income tax returns filed (including revised returns) increased from over 4.04 crore in 2014-15 fiscal to over 8.61 crore in 2023-24.

Direct tax-to-GDP ratio increased from 5.55 per cent in 2014-15 to 6.64 per cent in 2023-24. Tax buoyancy, which measures revenue mobilisation efficiency with respect to GDP growth, increased from 0.86 to 2.12 in the 10-year period.

In what could represent a significant step toward simplifying procedures and promoting compliance ease, the CBDT has released Revised Guidelines for the Compounding of Offences under the Income-tax Act, 1961. This is line with the Finance Minister’s announcement regarding the simplification and rationalisation of the compounding procedure,

Key simplifications in the guidelines include the elimination of offence categorization, the removal of limits on the number of times applications can be filed, and the allowance for fresh applications to rectify defects—previously not permitted. Additionally, offences under Sections 275A and 276B of the Act can now be compounded, and the previous time limit of 36 months for filing an application after a complaint has been removed.

To further facilitate compounding for companies and Hindu Undivided Families (HUFs), the requirement for the main accused to file the application has been eliminated. Both the main accused and any co-accused can compound offences by paying the relevant charges.