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