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Govt plans to cut scrutiny time of income tax returns to 1 year

Posted Date : 25-Apr-2016 , 08:16:20 am | Posted By CASANSAAR print Print
In an effort to make life simpler for income tax payers, the government is looking to reduce the time under which an assessment of an individual's tax returns picked up for random scrutiny is completed to one year.

Currently, assessment of tax returns picked up through a system of computer-driven scrutiny can be completed in two years after the close of the assessment year. This means scrutiny of returns for the financial year 2014-15, which is assessment year 2015-16 that ended on March 31, can be completed till March 2018.

In the first stage, the government has proposed to reduce this period to 21 months, which means assessment for the last financial year can be completed until December 2017.

The latest Finance Bill has proposed a shorter deadline for cases picked up for scrutiny without calling the assessee as well as those cases where best judgment assessment is done. This includes instances where returns are filed after the deadline, or are revised or where taxpayers have failed to comply with certain notices.

"We plan to reduce it by three months every year so that assessment is completed in 12 months," said a senior revenue department officer.

Sources said toning up the assessment process is one of the key focus areas of the government, which is trying to portray a more friendly administration. It has already asked the tax department to refrain from aggressive assessment and wants officers not to go on a fishing expedition during scrutiny of 1% of the returns.
 
In the next stage, the revenue department is insisting on timely completion of assessment as it has seen that the exercise is often completed towards the end of the stipulated period. "As the deadline approaches, there is typically a bunching during the last two months," admitted an officer, pointing out that nearly 70% of the assessment orders are issued closer to deadline.
 
It is only after the assessment order is received, which could be three years from the close of the financial year, that a taxpayer would get to know if there are additional claims. "It is too long a process and often you forget the details and enhances the burden on taxpayers. That is why we are trying to shorten the process," the officer said. #casansaar (Times of India)

Category : Income Tax | Comments : 0 | Hits : 1194

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