Changes in Income Tax Provisions-(Budget 2025-26 Highlights)

1. Assessment and Reassessment Amendments

1.1 Amendments to Section 139 (Return of Income)

• - The due date for filing returns for specific categories of taxpayers has been modified.

• - Changes in mandatory disclosures for certain income sources.

1.2 Amendments to Section 147 (Income Escaping Assessment)

• - Provisions streamlined to enable tax authorities to reopen assessments based on new information.

• - Reduction in the time limit for reopening cases.

1.3 Amendments to Section 148 (Issue of Notice)

• - New thresholds introduced for issuing notices.

• - Stricter timelines imposed to avoid unnecessary delays.

1.4 Amendments to Section 148A (Procedure before Issue of Notice under Section 148)

• - Detailed process defined for conducting inquiries before issuing notices.

• - Additional safeguards introduced to prevent unjustified reassessments.

1.5 Amendments to Section 149 (Time Limit for Reopening Assessments)

• - Maximum period for reopening cases revised.

• - Certain cases involving high-value transactions allowed an extended window.

2. Amendments Related to Block Assessments and Search Cases

2.1 Amendments to Section 153A (Assessment in Case of Search or Requisition)

• - Enhanced timelines for completing search assessments.

• - Requirement for more structured documentation to support findings.

2.2 Amendments to Section 153C (Assessment of Income of Other Persons)

• - Streamlined procedure for bringing undisclosed income to taxation.

• - New threshold criteria introduced for assessing related parties.

2.3 Amendments to Section 132 (Search and Seizure)

• - Provisions refined to define the scope of seized documents.

• - Revised criteria for determining ‘undisclosed income’ in search cases.

3. Procedural and Compliance-Related Amendments

3.1 Amendments to Section 234A, 234B, 234C (Interest on Delayed Tax Payments)

• - New interest rates prescribed for delayed tax payments.

• - Relief measures introduced for taxpayers affected by external factors.

3.2 Amendments to Section 270A (Penalty for Underreporting and Misreporting of Income)

• - Revised penalty structures based on the severity of misreporting.

• - Provision for reduced penalties in case of voluntary disclosures.

3.3 Amendments to Section 276CC (Prosecution for Failure to Furnish Return of Income)

• - Increased penalties for willful defaulters.

• - Exceptions provided for taxpayers with reasonable cause.

4. Other Notable Amendments

• - Expansion of e-assessment mechanisms to reduce manual interventions.

• - Enhanced reporting requirements for high-value transactions.

• - Introduction of pre-filled tax return forms to simplify compliance.

• - Increased power to tax authorities for investigating undisclosed foreign income.

Conclusion

These amendments under the Finance Bill 2025 aim to streamline tax compliance, reduce litigation, and enhance revenue collection while ensuring greater transparency. Taxpayers should carefully assess the implications of these changes and take necessary measures to comply with the revised provisions.

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Article Compiled by:-

~Mayank Garg

(LegalMantra.net Team)

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