Home / Finance / Personal Finance / Budget 2018 I-T relief for individuals: No more notices for filing mismatch
Budget 2018 I-T relief for individuals: No more notices for filing mismatch
I-T department will stop sending demand notices to individuals even when it finds discrepancies in the income reported by them in their returns when matched with the data from third-party entities
The government and tax officials appear to believe that the majority of people who file income-tax returns are honest taxpayers. This belief, among other things, has reportedly prompted the government to provide individual taxpayers a relief in Budget 2018 from demand notices sent by the tax department in case it finds discrepancies in the income reported in tax returns vis-a-vis reports from third parties like banks, stock exchanges, and car dealers.
Budget 2018 proposes to amend existing laws so that the I-T department stops sending demand notices to individuals where it finds discrepancies in the income reported by them in their I-T returns when matched against data from third-party entities, the Livemint reported on Tuesday. The move, according to the report, reverses last year's amendment, under which tax authorities were empowered to raise extra demands if they detected discrepancies.
Trust in taxpayers aside, the other reason behind the move is that the tax department was facing trouble in processing tax returns. Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra told the financial daily that it was found that "a large number of tax returns could not be processed due to such discrepancies". Adding there could "be many legitimate reasons for the mismatch", Chandra said the department didn't want to "take up income adjustments at the Centralized Processing Centre (CPC), Bangalore".
However, he said that if there was a "large variation", the I-T department could "pick up those cases for limited scrutiny". Further, Chandra, the Livemint report added, said that the decision was meant to provide small taxpayers relief and that it would be applicable from the assessment year 2018-19.
In a major relief to taxpayers, in October last year, CBDT had clarified that provisions of Section 143(1)(a)(vi) would not be used to issue intimation for any mismatches between the income and deduction in Form 16/16A and Form 26AS.
This move came as a relief to taxpayers who had not reported some of their permitted deductions to their employer while making their annual tax declarations for the purpose of Form 16 or claimed certain other permitted deductions while reporting income from house property and income from other sources, etc.
Prior to this, several taxpayers had received notices for the assessment year 2017-18 under Section 143 (1) (a) seeking clarification regarding the mismatch between the amount of total taxable income as reported in their I-T returns versus that reported in the tax deductible at source (TDS) certificates of Form 16/16A.
The relief in compliance comes after Budget 2018 was seen to have left middle-class taxpayers disappointed with no relief in I-T rates.
While presenting the Budget 2018 speech, Finance Minister Arun Jaitley did not provide any relief in the I-T rates for 2018-19.
Stating that the "government had made many positive changes in the personal income-tax rate" in the past three years, Jaitley said that, therefore, he was not proposing "any further change in the structure of the income tax rates for individuals".
However, Jaitley did propose to "allow a standard deduction of Rs 40,000", which would replace the current exemption under transport allowance and reimbursement of miscellaneous medical expenses.
To read the full story, Subscribe Now at just Rs 249 a month