Govt to extend time limit for filing updated returns for any assessment yr: FM

Finance minister Nirmala Sitharaman on Saturday, 1 February, announced extension of the time limit for filing updated returns for any assessment year.

The time limit is proposed to be extended from the current two years to four years.

Presenting the 14th consecutive Budget under the Narendra Modi government since 2014, Sitharaman also proposed the exemption of TCS (tax collected at source) for remittances for education purposes in cases where education loan is taken from specified financial institutions.

She added that 33,000 taxpayers have availed Vivad Se Vishwas 2.0 scheme to settle direct tax disputes.

The limit for tax deduction on interest income would be doubled to Rs 1 lakh for senior citizens, and the limit for TDS on rent is proposed to be increased to Rs 6 lakh.

Besides, the budget extends the period of incorporation by five years for startups to avail of tax benefits.

Sitharaman also announced rationalisation of TDS (Tax Deduction at Source) regime to ease compliance burden.

Presenting the Budget for 2025-26, she said tax proposals are guided by income tax reforms for middle class, TDS rationalisation, and easing compliance burden.

The government will also be introducing a new Income Tax (I-T) bill in Parliament next week.

Reforms are not destinations but means to achieve good governance for the people and economy, the finance minister said and added that the new I-T bill will be half of the current volume, clear and direct in wording.

Meanwhile, the government will increase the limit of TCS on remittances under RBI's liberalised remittance scheme from Rs 7 lakh to Rs 10 lakh.

Also, Sitharaman said that 35 additional goods for EV battery, 28 additional goods for mobile phone battery production will be included in the list of exempted capital goods.

The government will introduce a new Income Tax bill next week to take forward the "trust first, scrutinise later" concept, Finance Minister Nirmala Sitharaman said on Saturday.

In another major reform move, the minister announced that the Foreign Direct Investment (FDI) in the insurance sector will be increased to 100 per cent from 74 per cent.

Presenting the Budget for 2025-26, Sitharaman said that over the past 10 years, the government has implemented several reforms for the convenience of taxpayers, including faceless assessment.

Sitharaman also mentioned the government coming out with taxpayers' charter, faster returns process and almost 99 per cent of the income returns being on self-assessment.

The government will introduce new Income Tax bill next week in Parliament to take forward "trust first, scrutinise later" concept.

The bill is expected to simplify the current Income Tax (I-T) law and make it easier to comprehend.

Pursuant to the Budget announcement by Sitharaman for a comprehensive review of the Income-tax Act, 1961, the CBDT had set up an internal committee to oversee the review and make the Act concise, clear, and easy to understand, which will reduce disputes, litigation, and provide greater tax certainty to taxpayers. Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act.

In her Budget speech on Saturday, Sitharaman said the government will also facilitate the upgradation of air cargo warehousing for high-value perishable horticulture items as well as initiate measures to deepen and expand services of India Post payments bank in rural areas.