New ITR kinds prone to seize solely related knowledge: CBDT Chairman – Company Technique & Outlook

What’s the plan for litigation administration?

It’s a precedence space and we now have made some notable progress. We began this yr with a pendency of 5.4 lakh on the first appellate stage, and we now have disposed of 1,53,000 instances between April-January this fiscal in opposition to 1.08 lakh throughout the corresponding interval of the final fiscal, a discount of 40 per cent. On this yr’s Price range, some basic adjustments have been made to curb pendency, minimise litigation and transfer in the direction of dispute decision. Step one to minimise litigation includes clubbing collectively two separate proceedings — evaluation and penalty — into one. Until now, there was an entire course of involving first evaluation and the attraction course of that might take about 4-5 years. This was adopted by penalty proceedings, which might sometimes take about 7-8 years, after which additional appeals. By clubbing these proceedings, the litigation quantity has been halved or near-halved. The second step has a dispute decision element, which additionally results in litigation. An extra window has been offered now to the taxpayer that even after discover, if the individual feels that he/she will be able to pay some further tax and shut the difficulty, that chance has been offered.

Even after the evaluation has been accomplished, the taxpayer now has an choice to pay further tax and shut the continuing. We consider the taxpayers might favor to get decision at an early stage as an alternative of appeals. This additionally reduces the variety of appeals.

How will the protected harbour provision within the Price range affect FDI?

India is a sexy nation for the software program trade. There was component of uncertainty up to now about protected harbour provisions as they have been categorised into completely different verticals. One class was IT-ITES, the opposite was information processing outsourcing (KPO) and the third was contract R&D. Every of those had completely different charges. The speed for contract R&D, KPO was 18-24 per cent and 17 per cent for IT-ITES. There was at all times a terror that if they arrive for protected harbour, the division would possibly recognise them interchangeably — say it’s not IT-ITES however KPO, or a part of it’s IT-ITES and a part of it KPO. Mainly, there was no certainty within the system. All these classes have now been introduced into one umbrella, and the speed has been stored as 15.5 per cent. That brings plenty of readability and certainty for the software program trade. This may have an effect on the FDI as nicely.

Are you able to share some particulars of the brand new guidelines and kinds based mostly on new Revenue Tax Act 2025?

They’ve not been notified, so I can’t be supplying you with specifics. However I can speak concerning the basic philosophy with some examples. We’ve got leveraged on the processes adopted by companies exterior the division. For instance, when an individual opens a checking account and if he/she doesn’t have a PAN, information a Kind 60. This was the requirement when the banks weren’t within the CBS and the processes have been largely handbook in nature. The banks have now been computerised. They’re capturing the information attributes of the individuals involved. Due to this fact, can the Kind 60 requirement be rationalised? We’re working in the direction of that.

One other component is audit experiences. Audit is accomplished and on the similar time, return can also be filed. Can that audit report be designed in a fashion that some element of it will get pre-populated within the return itself, so that there’s a consistency between the audit report and the returns? Primarily, the thought is that the kinds you give to the taxpayer are literally are sensible kinds, which seize solely related knowledge. The place irrelevant knowledge is recognized, it needs to be excluded. Remaining knowledge factors have to be transformed right into a format that helps significant evaluation, transferring past mere knowledge assortment. Can data reported via one type be auto-populated or included in one other type to make sure consistency between completely different kinds, significantly the audit report and ITR type?

What’s the large message to the taxpayer on this Price range?

The tax division has adopted a brand new mantra targeted on taxpayer belief, supported by less complicated kinds, streamlined guidelines and structural reforms. We encourage taxpayers to embrace this shift; when earnings is reported precisely, the necessity for enforcement diminishes. By selecting collaboration over confrontation, we purpose to offer the knowledge and readability that naturally drive compliance. As soon as this basis is established, we will focus our collective power on extra advanced strategic points.