75,000 updated tax returns filed; gamers under scanner
2 min read 17 Aug 2022, 01:30 AM ISTThe updated return scheme allows assessees to revise their I-T returns going back two years
PremiumNEW DELHI : Within four months of the introduction of the updated returns scheme, nearly 75,000 revised income tax returns have been filed voluntarily, even as several online gamers have come under the scanner for failing to pay taxes for previous years.
Introduced in the budget to promote voluntary compliance, the government is set to start a campaign to popularize updated income tax returns in the coming months.
The central board of direct taxes is set to send notices to defaulters of the previous two years, asking them to file updated returns as the department gathers information using technology and through different government sources.
The updated return scheme, introduced on 1 April, allows assessees to revise their income tax returns going back two years.
If the updated returns are filed within 12 months, the taxpayer needs to pay 25% additional tax on the total tax and interest accrued on it. The penalty payable doubles to 50% if the ITR is updated between 13 months and 24 months. Penal interest on self-assessment tax is levied at 1% per month on a simple interest basis.
Self-assessment tax collection rose by a massive 275% in April-July to ₹43,500 crore from a year earlier.
“Even though we are yet to start a campaign, 75,000 updated returns have been filed so far. We will start a campaign soon to inform assessees that they could revise their returns. Secondly, we will start telling people if they have not paid their taxes, they should file updated returns," said a senior government official. He added that the tax department would be examining returns filed over the past two years using other information sources or through investigation.
“When we went for an investigation recently, we found that a large number of people, like online gamers etc, did not file returns for the last two years. They will be asked to file updated returns," added the official.
In recent years real money gaming, including those that let players bet on fantasy sports, card games and others, have exploded in popularity even as regulatory ambiguity on whether some of these are games of skill or games of chance has prevailed.
According to Sandeep Sehgal, partner-tax at AKM Global, a tax and consulting firm, updated returns will reduce litigation.
“The taxpayers who have missed out on filing returns or paying due taxes have an excellent opportunity to come clean for the recent few years. This will augment tax revenue for the government as well," said Sehgal.
However, the eligibility is also restricted as taxpayers cannot use it to claim any additional loss, refund or benefit, he said. Moreover, taxpayers who have any pending proceedings for the relevant year cannot avail of this, added Sehgal.
The scheme essentially gives a chance to assessees to revise returns and prevent prosecution. The high cost of non-compliance will encourage assessees to avail of this scheme, experts said.
Aravind Srivatsan, tax leader, Nangia Andersen LLP, said that several court rulings have permitted the launch of prosecution and taken a hard stance on income earners not paying and filing tax returns. This scheme allows such assessees to clear their dues.
“With buoyant capital markets and private equity chasing good business models, and technology automating taxpayer data, making annual information statement a comprehensive data capture document, voluntary compliance will be the way forward as the cost of continued non-compliance would weigh in favour of availing this scheme," he said.
dilasha.seth@livemint.com
