Senior citizens above 75 years of age with only pension and interest incomes have been exempted from filing tax returns, Finance Minister Nirmala Sitharaman announced on Monday.
While tabling the Union budget 2021-22 in Parliament, the minister said that the number of income tax return filers has increased to 6.48 crores now from 3.48 crores in 2014.
"We shall reduce the compliance burden on our senior citizens who are 75 years of age and above. For senior citizens who have pensions and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax from their income," she said.
Sitharaman said serious tax offences of concealment of income of over Rs 50 lakh can be reopened even after 10 years.
"Presently an assessment can be reopened up to six years and in serious tax fraud cases up to 10 years, as a result, taxpayers have to remain under uncertainty for a long time. I, therefore, propose to reduce this time limit for reopening of assessments to three years from the present six years. In serious tax evasion cases too, only where there is evidence of concealment of income of Rs 50 lakh or more in a year can the assessment be reopened up to 10 years. Even this reopening can be done only after the approval of the principal chief commissioner, the highest level of the income tax department," she said.
The Finance Minister also announced to constitute a dispute resolution for small taxpayers that will be faceless to ensure efficiency, transparency and accountability. Anyone with a taxable income up to Rs 50 lakhs and disputed income up to Rs 10 lakhs shall be eligible to approach the committee, she said.
She also proposed to make income tax appellate tribunals faceless and to set up national income tax appellate tribunal centre.
"I propose to make Income Tax Appellate Tribunal faceless. We shall establish a national faceless income tax appellate Tribunal centre. All communication between Tribunal and the appellant shall be electronic, where personal hearing is needed, it shall be done through video conferencing," the minister said.
Sitharaman said that exemption from tax audit limit doubled to Rs 10 crores turnover for companies doing most of their business through digital modes.
"Currently, if your turnover exceeds Rs 1 crores, you have to get your accounts audited. In February 2020 budget, I had increased the limit for taxation audits to Rs 5 crores for those who carry out 95 per cent of their transactions digitally. To further incentivise digital transactions and to reduce compliance burden, I propose to increase this limit for tax audit for such persons from five crores to Rs 10 crores," she said.
