Taxpayers have paid an additional `1,250 crore in due taxes to the government under a new facility for updated return filing for previous years initiated by the income tax department to encourage voluntary compliance.
Nitin Gupta, Chairman, Central Board of Direct Taxes on Monday said the tax department has received 1.5 million updated returns this fiscal. The CBDT has also taken up about 68,000 e-verification cases on a pilot basis relating to information of financial transactions for fiscal year 2019-20.
“So far, e-verification in about 56% of the cases or 35,000 cases has been completed while the remaining are under process,” Gupta said, indicating that the department will increase the number of cases taken up for this from next fiscal.
The cases were selected September 2022 and the department hopes to complete most cases within 90 to 120 days.
Under the e-verification scheme, the income tax department informs the taxpayers about any mismatch in their income tax return and financial data in the Annual Information System. The taxpayer then has a chance to either rectify the return and file and updated return or explain the reason for the mismatch in the return and the AIS. The entire process is online and there is no face to face interaction between the taxpayer and the department.
“The scheme is extremely beneficial to the taxpayer as it enables them to explain the financial transaction with evidence. It also helps in data correction and cleaning and prevents initiating of proceedings on misreported information,” Gupta said.
While he declined to share the risk criteria based on which cases are picked up for e-verification by the IT system, it is likely that most of these cases related to high value transactions. The updated return filing is the next step post e-verification.
The Union Budget 2022-23 has allowed individual taxpayers to update their income tax returns within two years of the end of the relevant assessment year.