The Finance Bill 2025 has been cleared by the Lok Sabha. Union Finance Minister Nirmala Sitharaman proposed to amend Section 143(1) of the Income Tax Act, 1961. The amendment was aimed at providing for “checking any inconsistency” in the return with respect to the information in the return of any preceding year.
The Income Tax Department has also released FAQs on the same.
If you file an income tax return (ITR) every year, you will need to be more cautious while filing it next time. The government has made a big change in the Finance Bill 2025, which will match your previous and current ITR. If any error or inconsistency is found, you may get a notice from the Income Tax Department.
So far, whenever you filed your tax return, the department used to look only at those cases where there was a clear mistake – like a mistake in calculation, wrong tax claim or showing any deduction incorrectly. But under the new rule, your ITR of this year will be matched with the ITR of last year. That is, if there has been a major change in your income, deductions or tax credit and you have not given the correct information about it, then you may have to face questions.
Also read: Tax deadline 2025: Complete these 10 important financial tasks before 31 March 2025
Why was this amendment brought?
Its main purpose is to ensure that people report their income and deductions honestly. It has been seen many times that taxpayers show something one year and the same things disappear the next year. For example, if you claimed tax exemption on an investment last year, but did not show it in your return this year, it will be considered a discrepancy and you may have to explain the reason for it.
Ashish Mehta, Partner at Khaitan & Co, says, “Over the years, there has been a gradual augmentation in the scope of adjustments under section 143(1). From being a simple arithmetic calculation verification, the provision has been given teeth in terms of additions based on additional income streams that are reported against taxpayers PAN and not reflecting in their tax filings, negative observations in tax audit reports not reflecting in tax filings, etc.”
While the exact scope of the present amendment is yet to be discovered,
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