Time limits of return filing and assessment in Income tax which has been proposed to be reduced by Budget 2021

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As we know that under Income Tax and many other law as well government is trying to increase the use of technology and hence reducing the time to process the return or finalizing the assessment.

Some of the time limits which have been amended/ modified or reduced by Income tax act are as under:

Section 139: Time limit for filing return of Income:

• Due date for filing return of income of spouse of a partner whose partnership’s books of accounts are getting audited.
  • Due date before Amendment: 31st July
  • Due date after Amendment: 31st October

Now a small twist to such amendment is that such amendment is only applicable to the spouse to whom provision of section 5A i.e. Apportionment of income between spouses governed by Portuguese Civil Code which means this amendment will not apply to all.

• Due date for filing return of income of a partner of firm who are getting audit under section 92CE.
  • Due date before Amendment: 31st July / 31st October
  • Due date after Amendment: 30th November

• Due date for filing belated or revised return u/s 139(4) / 139(5)
  • Due date before Amendment: Earlier of 31st March or completion of the assessment
  • Due date after Amendment: Earlier of 31st December or completion of the assessment

It is interesting to note that although amendment has been made to due date under section 139. However simultaneous amendment has not been made to section 234F for amendment in provision related to late fees.

• Due date for processing of Income tax return u/s 143(1) of the Income tax act:
  • Due date before Amendment: 1 Year from end of FY in which return filed
  • Due date after Amendment: 9 Months from end of FY in which return filed.

Changes in timelines relating to assessment proceedings:

• 143(2) Issuance of notice of assessment:
  • Time limit before Amendment: 6 Months from end of FY in which return filed
  • Time limit after Amendment: 3 Months from end of FY in which return filed
• Issuance of notice u/s 148:
  • Time limit before Amendment: Reopening of Assessment 6 Years / 4 Years from end of AY
  • Time limit after Amendment: 3 Years from end of AY, 10 Years from end of AY if Income escaping assessment exceeds Rs. 50 Lakhs.
• Time limit for completion of original assessment u/s 153:
  • Time limit before Amendment: 12 Months from end of FY in which return filed
  • Time limit after Amendment: 9 Months from end of FY in which return filed.

This are all the time limits which have been changed by Budget 2020 and all shall be applicable from AY 2021-22.

We might have missed some due dates so you can comment that below.

What are your thoughts on restricting such time limits?

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