The Central Board of Direct Tax (CBDT) has set a record for search operations against 'undisclosed income' in FY22.

With two months and a week left until the end of the fiscal year, the total 'undisclosed income' as per publicly available data is about Rs 32,000 crore (Rs 320 billion), far eclipsing the level set in FY19, when it was just under Rs 18,600 crore (Rs 186 billion).

Read it along with the expanded 'predicate offences' powers of its brother department, the Enforcement Directorate (ED).

The figures reflect the expanded powers the tax department has amassed in a relatively short period.

It began with the Finance Act of 2015, when the government brought in the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The penal provisions of the Act connect with those of the Prevention of Money Laundering Act, which meant that any evidence of foreign income that was not taxed would qualify as an offence of money laundering.

In rapid succession came the Benami Transactions (Prohibition) Amendment Act of 2016 and then the Finance Act of 2017 that connected PAN numbers with Aadhaar.


The Finance Act of 2017 also removed the need for tax officials to declare to a court why they believe a search operation on someone is necessary.

Next year's Finance Act disallowed the scope for tax offenders under Benami or Black Money law to pay a higher penalty and get away.

The Income-Tax department has moved the Supreme Court challenging an order by the Allahabad High Court quashing income tax notices issued after March 31, 2021, under the old re-assessment regime.

This is a setback for multiple taxpayers who had got favourable orders from various high courts on reassessment proceedings initiated by the tax authorities.

In the 2021 budget, the government had amended a provision governing reassessment proceedings under Section 148 of the Income-Tax Act, 1961. The amendment had limited the period for issuing notices with respect to reopening past years' assessment to three years from six earlier.

The finance ministry has notified the 'e-advance rulings Scheme', enabling taxpayers to file their application for advance ruling through e-mail, a move that will majorly benefit non-resident assesses in such proceedings. The 'e-advance rulings Scheme, 2022', notified by the Central Board of Direct Taxes (CBDT), further provides that hearing before the Board for Advance Rulings will be conducted through video conferencing/ video telephony, where taxpayers would be granted an appropriate opportunity of being heard.

The advance ruling mechanism is provided in the Income Tax Act to provide upfront clarity to non-residents and certain other specified taxpayers, regarding the taxability of their transactions in India under Indian I-T laws.

The scheme also provides that all communications between the taxpayer/ income tax authorities and the Board for Advance Rulings will take place in electronic mode.

Cryptocurrencies or digital assets issued to employees by crypto exchanges as incentives are set to come under the taxman's lens.

The question is whether the coins - most of them issued by Indian exchanges - can be construed as income and what could be the income tax applicable on the digital assets.

Many exchanges have rolled out their own tokens and offered these as part of their employees' annual income - along the lines of employee stock ownership plan or esop. In some cases, it was also linked to employee performance.

Tax experts say while the arrangement may look similar to an esop, it will not be treated as one under the tax laws.

"Cryptocurrency or coins given to employees are nothing but salary and shouldn't be equated to esops as these have liberal interpretation and leeway when it comes to income tax," said Sudhir Kapadia, national leader-tax, EY India. "These coins should face normal income tax, too, on their actual market price in the year the employee received them."

The income tax department on Thursday said it has issued refunds of over Rs 1.54 lakh crore to more than 1.59 crore taxpayers so far this fiscal. This includes 1.20 crore refunds of Assessment Year 2021-22 (fiscal ended March 31, 2021), amounting to Rs 23,406.28 crore.

“CBDT issues refunds of over Rs 1,54,302 crore to more than 1.59 crore taxpayers from 1st Apr 2021 to 10th January 2022,” the I-T department tweeted.

This includes personal income tax refunds of Rs 53,689 crore to over 1.56 crore entities and corporate tax refunds of over Rs 1 lakh crore to more than 2.21 lakh businesses.

Thousands of tax assessees and several chartered accountant associations in the country have complained of discrepancies in filed returns for the assessment year 2021-22.

This has led to furious responses from income tax professionals, who struggled to meet the deadline despite the errors cropping up in the new income tax portal. They would have to work hard again to resolve the problems faced by tax assessees.

Cryptocurrencies or digital assets issued to employees by crypto exchanges as incentives are set to come under the taxman’s lens.

The question is whether the coins—most of them issued by Indian exchanges—can be construed as income and what could be the income tax applicable on the digital assets.

Many exchanges have rolled out their own tokens and offered these as part of their employees' annual income—along the lines of employee stock ownership plan or esop. In some cases, it was also linked to employee performance.

Tax experts say while the arrangement may look similar to an esop, it will not be treated as one under the tax laws.

Infosys CEO Salil Parekh on Wednesday said the company is working closely with the Income Tax Department on the next set of areas related to the I-T portal as new modules will be added to it. Infosys, in 2019, was given the contract to develop the new portal. It was launched in June last year and stakeholders had reported glitches and difficulties in the functioning of the portal.

"On the I-T project, we are extremely proud that as of December 31, as was reported, 5.8 crore returns were filed through that timeframe. On the day itself, over 46 lakh returns were filed and the deadline was maintained..." Parekh told reporters.

He also said that users were able to use the portal to file their tax returns and that the company was grateful that it could contribute to the Digital India vision.

The Central Board of Direct Taxes (CBDT) has extended the due dates for filing tax audit reports and income tax return for certain category of taxpayers for FY 2020-21. This was announced by the income tax department via a press release issued on January 11, 2022.

The ITR deadline extension has come after various taxpayers asked the tax department and finance ministry to extend the ITR filing dates due to the rising coronavirus cases and issues with the new income tax portal. “On consideration of difficulties reported by the taxpayers and other stakeholders due to COVID and in electronic filing of various reports of audit under the provisions of the Income-tax Act, 1961, the Central Board of Direct Taxes has decided to further extend the due dates for filing of income tax returns and various reports of audit for the assessment year 2021-22,” said the press release.

Chartered accountants’ apex body ICAI has sought time till March 31 for filing tax audit reports without penalties, citing the coronavirus pandemic situation and “consistent technical glitches” being faced in using the new I-T portal.

In this regard, the Institute of Chartered Accountants of India (ICAI) has submitted a representation to Central Board of Direct Taxes (CBDT) Chairman J B Mohapatra.
ICAI has requested that penalty and other consequences should be waived for filing tax audit reports and other reports/certificates for AY (Assessment Year) 2021-22 till March 31, 2022.

The Central Board of Direct Taxes (CBDT), announced via its Twitter account, that it has issued refunds of over Rs 1,50,407 crore to more than 1.48 crore taxpayers from 1st April,2021 to 3rd January,2022.

“Income tax refunds totaling Rs. 51,194 crore were distributed in 1,46,24,250 cases, while corporate tax refunds totaling Rs. 99,213 crore were distributed in 2,19,913 cases. This includes 1.1 crore refunds for the fiscal year 2021-22, totaling Rs. 21,323.55 crore,” stated the tweet.

Fresh trouble could be brewing for the cryptocurrency exchanges as the income tax department is now contemplating investigating them over the tax applicable to their total income. This comes after the Goods and Services Tax (GST) department conducted searches in the past week on the crypto exchanges. The direct tax department could look into the quantum of corporate tax payable for the cryptocurrency exchanges, said people aware of the development.

In the last week, the Directorate General of GST Intelligence (DGGI), an investigation arm of the indirect tax department, conducted searches on several crypto exchanges and asked them to pay GST on their transaction fees or margins. The fear is that the tax department will question the way exchanges record their revenues.

"There is no clarity in the way the exchanges recognise revenues. Each firm does it as per their understanding of accounting and the income tax officials have concerns over the ambiguity," a person aware of the development said.

The income tax department has brought in changes to the existing faceless appeal scheme, easing the process for taxpayers wanting a personal hearing through video conference while appealing against a tax demand by the department. The Central Board of Direct Taxes (CBDT) on December 28, notified the 'Faceless Appeal Scheme, 2021' and said that the Commissioner (Appeals) shall allow the request for personal hearing via video conference and communicate the date and time of hearing to the appellant through the National Faceless Appeal Centre.

"Such a hearing shall be conducted through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible...," said the 'Faceless Appeal Scheme, 2021'.

However, a person would not be permitted to appear before the income-tax authority either personally or through an authorised representative in connection with any proceedings under this scheme.

If you have not verified your income tax return(ITR) for last year, i.e., FY 2019-20, then there is good news for you. The tax department via a circular dated December 28, 2021, has announced that all the income tax returns that were filed last year and are pending verification, either due to non-submission of ITR-V or e-verification, can be verified till February 28, 2022. Further, once the ITR is verified, then these tax returns will be processed by the tax department by June 30, 2022.

Under the income tax laws, an individual is required to verify ITR within 120 days of filing it. If the ITR is not verified, then it will be termed as ‘Defective Return’. Such an ITR will not be taken up for processing by the tax department till it is verified. It will be assumed that you have not filed your income tax return for that particular year.

The Central Board of Direct Taxes (CBDT) has constituted a task force to restructure the Income Tax (I-T) Department. The panel comprising 10 senior officials of the I-T department will reassess its role and functions in view of the faceless regime aimed at cutting down physical interface between a taxpayer and the department.

CBDT has given a seven-point agenda to the task force. They include restructuring the department and rationalising national and regional e-assessment centres that are the primary gateway in communicating with taxpayers.

The panel has been asked to submit its recommendations by March 31, 2022.

The move is significant as taxpayers have raised concerns over challenges in the faceless regime introduced last year.

Income Tax refunds of over Rs 1.49 lakh crore have been issued to 1.45 crore taxpayers so far this fiscal, the I-T department said on Tuesday.

This includes 1.07 crore refunds of AY 2021-22 (fiscal ended March 31, 2021), amounting to Rs 21,021 crore. More than 4.67 crore ITRs for the 2020-21 fiscal (ended March 2021) have been filed till December 27.

In a tweet, the department said Income Tax refunds of Rs 50,793 crore have been issued to over 1.42 crore entities, and corporate tax refunds of Rs 98,504 crore have been issued in over 2.19 lakh cases.

The newly launched Annual Information Statement (AIS) is a comprehensive statement containing details of 46 of
the financial transactions (income, investment, expenditure) undertaken by you in a financial year (FY). Sujit Bangar, Ex-IRS officer and founder, Taxbuddy.com, an ITR filing website, says, "AIS is an information statement. It provides details of all the income received from various sources irrespective of whether tax has been deducted on such income or not. Further, any investments made by you will be reflected in the AIS as well."

Here is a look at 46 financial transactions that reflect in the AIS, as per the income tax website:

1. Salary
AIS will show information about the salary amount paid to you along with the tax deducted, if any. It will show the TAN of employer and PAN of employee. The amount mentioned in the AIS will be gross salary including all exempt allowances. Individual will be required to claim exemption and deductions as applicable while filing income tax return (ITR).

The paper trail on stash money often vanishes beyond a mountain of Panama and Pandora papers. Several tax havens like Switzerland, Jersey, Guernsey and British Virgin Islands are refusing to disclose information on investment outfits and trust structures which have been dismantled or bank accounts that have been closed - particularly, if such accounts were shut even days before the treaty with the respective jurisdiction was signed.

It's a lesson that tax officials are learning the hard way as they strive to convert intelligence into evidence.

Arrangements to ringfence hidden wealth can be complex: the investment companies may be incorporated in one country, the discretionary trust or foundations linked to them are set up in another offshore centre, the bank accounts are likely to be with an old, trusted custodian like a Swiss Bank, and the person behind everything is an Indian passport holder residing in London, New York or Dubai.

Income tax refunds of over Rs 1.44 lakh crore have been issued to 1.38 crore taxpayers so far this fiscal, the I-T department said on Wednesday.

This includes 99.75 lakh refunds of Assessment Year (AY) 2021-22 (fiscal ended March 31, 2021) amounting to Rs 20,451.95 crore.

More than 4 crore ITRs for the last fiscal have been efiled, with around 8.7 lakh returns being filed on December 21 alone, the I-T department said on Wednesday.

With December 31 being the last date for filing FY’21 income tax returns (ITRs) for individual taxpayers, there has been surge in e-filing and 46.77 lakh returns were filed in the last seven days.