The deadline for submitting an income tax audit report for the financial year 2023-24 (assessment year 2024-25) was October 7, 2024. If you need to make any modifications and submit a revised audit report to replace the originally filed tax audit report, you must do so before the conclusion of the relevant assessment year.

"For the current assessment year of 2024-25, the deadline for uploading a revised tax audit report pertaining to financial year 2023-24 shall be March 31, 2025," says SR Patnaik, Partner (Head - Taxation), Cyril Amarchand Mangaldas.

Under what circumstances you can file a revised tax audit report?
Chartered accountant Prakash Hegde says that a tax audit report that has been uploaded can only be revised under specific conditions outlined in Rule 6G.

Ankit Jain, Partner, Ved Jain & Associates explains what Rule 6G says. He says that a revised tax audit report is required to be filed if there are payments that impact disallowances under section 40 or 43B (such as late payment of expenses or taxes) after the tax audit report has been submitted. "If such payments are made before the due date of the ITR but after the initial tax audit, the report can be revised to reflect these adjustments. These include payment of TDS, bonuses, leave encashment or interest to banks," says Jain.

The finance ministry on Wednesday said more than 34.84 lakh audit reports, including about 34.09 lakh Tax Audit Reports (TARs), have been filed for assessment year 2024-25 on the e-filing portal till October 7. The income tax department had extended the date for filing the audit report from September 30 to October 7.

There is an increase in the filing of TARs for the AY 2024-25 by around 4.8 per cent compared to the filings of TARs on the due date for AY 2023-24.
"To assist taxpayers, the department conducted extensive outreach programmes through emails, SMSs, webinars, social media campaigns and messages on the Income Tax portal to create and raise awareness among the taxpayers about filing TARs and other audit forms by the due date. Various user awareness videos were uploaded on the Income Tax portal to provide guidance," the ministry said in a release.

It further said that these concerted efforts have been helpful to taxpayers and tax professionals in timely compliance in filing TARs.

According to the finance ministry, the e-filing Helpdesk team handled around 1.23 lakh queries from taxpayers during September and October 2024, proactively supporting them throughout the filing period.

The deadline for submitting income tax audit reports using Form 10B/10BB has been extended for certain taxpayers. The new deadline for this category of taxpayers to submit their tax audit reports is November 10, 2024. This extension was announced by the Ministry of Finance through the Central Board of Direct Taxes (CBDT) in an order dated October 7, 2024.

Which taxpayers will enjoy the extended deadline to submit tax audit report
According to the order by the Ministry of Finance, these taxpayers will benefit from this extended deadline:

Trusts, institutions, funds, and
Others who are liable to file a tax audit report using Form 10B/10BB.
Individuals with business or professional income who are subject to a tax audit under section 44AB need to submit their audit report using Form 3CD, 3CA, and 3CB. The extended deadline for these taxpayers was October 7, 2024.

....It has been brought to the notice of the CBDT that in some cases, such trusts/institutions/funds, could not file the audit report in the correct prescribed form….., the CBDT in exercise of the powers conferred under section 119 of the Act, hereby further allows such trusts / institutions/ funds to furnish such audit report in the applicable Form No. 1OB / 10BB on or before 10 November, 2024," said CBDT in the said order under section 119.

The Income Tax department on Monday announced the formation of an internal committee to review the Income-tax Act and invited public inputs and suggestions on four key areas — simplification of language, litigation reduction, compliance reduction, and obsolete provisions. The Central Board of Direct Taxes (CBDT), the body overseeing the Income Tax Department, in a statement said the public can send their suggestions on the website by entering their mobile number and validating it via one-time password (OTP).

“The committee invites public inputs and suggestions in four categories: simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions.

The Central Board of Direct Taxes (CBDT), under the Department of Revenue, Ministry of Finance, has recently released updated regulations outlining the process for granting condonation of delays in submitting income tax returns (ITRs) that include claims for refunds or carrying forward losses. These latest directives effectively override any prior guidelines or instructions that were in place.

Here are the top points:

How much tax do I have to pay? Calculate now

1. The authority to approve or deny claims based on amounts are allocated as follows:

> Claims up to Rs 1 crore will be decided by Principal Commissioners of Income Tax (Pr. CsIT).
> Claims falling between Rs 1 crore and Rs 3 crore are within the jurisdiction of Chief Commissioners (CCsIT).

In a big win for the tax department, the Supreme Court ruled on Thursday that the Income Tax Act must be interpreted with the amended provisions effective after April 1, 2021. This decision will impact approximately 90,000 reassessment notices, as clarified by the court.

The ruling stems from the case involving Ashish Agarwal and confirms that the Taxation and Other Laws (Relaxation & Amendment of Certain Provisions) Act (TOLA) will remain applicable to the Income Tax Act beyond the specified date.

While giving out the verdict, Chief Justice DY Chandrachud said that ITO Surat by Gujarat HC, Rajeev Bansal judgment by Allahabad HC, Siemens vs DCIT Bombay HC judgment, Ambika Anand Orissa HC judgment, Twilight industries, Ganesh Das Khanna from Delhi HC were set aside.

The legal disputes arose during the pandemic, when the government temporarily extended the previous regulations governing the reopening of old tax returns.

The government has proposed to invite suggestions on Income Tax Act, 1961, from the private sector and tax experts beginning October, as part of an exercise to simplify the direct tax law, sources said.

In a meeting with industry chambers earlier this month, the government said that a functionality will be created in the Income Tax portal wherein suggestions could be made on different sections of the I-T Act with a view to simplifying the language and reducing litigation.

Following the Budget announcement, the Central Board of Direct Taxes (CBDT) had set up an internal committee for a comprehensive review of the six- decade old direct tax law and make it concise, lucid, easy to read and understand.

"In the meeting with industry associations, the revenue department suggested that the functionality be developed by the first week of October to give suggestions for reworking the income tax law," a source said.

Another source said that the exercise is not to write a new tax law or a tax code.

"Just by removing the outdated clauses, the number of pages could be brought down by about 100. The aim of the I-T law review is simplification of language and mitigation of litigation," the source added.

The deadline to submit the income tax audit report has been extended to October 7, 2024 for those taxpayers who are required by law to conduct an income tax audit of their accounts and submit the audit report on or before September 30, 2024. The report is required to be submitted online on the e-filing ITR portal. This extension is important as the penalty for submitting a tax audit report after the deadline is Rs 1.5 lakh or 0.5% of total sales, whichever is lower.

“Central Board of Direct Taxes (CBDT) has decided to extend the specified date for filing of various reports of audit for the Previous Year 2023-24, which was 30th September, 2024 in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, to 07thOctober 2024,” said the Income Tax Department in a circular released on September 29, 2024.

For which taxpayers is the tax audit report submission deadline extended?
In the circular, CBDT has specifically mentioned the category of taxpayers for whom the deadline has been extended to October 7, 2024.

Wealthy Indians are now buying properties overseas under the names of the kids through RBI’s Liberalised Remittance Scheme (LRS), the Times of India has claimed in a report.

According to the report, Indians are increasingly investing in properties overseas, with locations such as California, Dubai's Emirates Hills and Palm Jumeirah, and London’s Mayfair being popular choices. Recently, minors have begun investing in these overseas properties alongside their parents, especially in the UAE.

The LRS allows individuals to remit up to $250,000 per financial year for various purposes, including buying property. An amendment effective August 24, 2022, requires unused funds to be returned to India within 180 days if not invested. This has made it difficult to accumulate funds over time for property purchases. To navigate these restrictions, parents are now using minors to help remit enough funds for property purchases, the report claimed.

According to Tax partner Gautam Nayak at CNK & Associates, “Funds can be remitted abroad by a minor under LRS, using gifts from parents in India. Further, gifts from parents to children do not have any tax impact in India.”

Foreign investors and offshore funds often face scrutiny when claiming tax treaty benefits in India. A recent Delhi High Court ruling in the case of Tiger Global International II Holding provided significant relief by upholding tax treaty benefits under the India-Mauritius Tax Treaty.

The India-Mauritius tax treaty offers beneficial tax treatment with respect to various streams of income including capital gains tax exemption for Mauritius-based investors on sale of shares in a foreign company. However, Indian tax authorities regularly assess whether these investments genuinely qualify for tax exemptions, scrutinising issues like beneficial ownership and control. In 2018, Tiger Global sold shares of Flipkart Singapore to Walmart International Holdings Inc. As a tax resident of Mauritius with a tax residency certificate (TRC) issued by the Mauritian tax authorities, Tiger Global claimed an exemption from capital gains tax in India on the sale of shares of Flipkart.

However, Indian tax authorities and the Authority of Advance Ruling (AAR) denied the benefits to Tiger Global, alleging that Tiger Global was merely a sham or conduit entity, and that it was controlled by Tiger Global Management LLC (TGM LLC), based in the United States.

Several significant changes to your income taxes will take effect on October 1. In the Union Budget 2024, there were few changes made to Aadhaar card, STT, TDS rate, Direct Tax Vivad Se Vishwas Scheme 2024. The proposed changes were passed in the Finance Bill.

Here is a look at important tax changes that will come into effect from October 1, 2024.

1. STT
The 2024 budget has increased the securities transaction tax (STT) on Futures & Options (F&O) of securities to 0.02 percent and 0.1 percent respectively and income receipts from share buybacks would be taxed in the hands of beneficiaries.

This amendment is passed and to be made effective from October 1, 2024.

2. Aadhaar
In order to prevent PAN misuse and duplication, effective October 1, the provisions that permit citing an Aadhaar Enrollment ID in lieu of an Aadhaar number, Aadhaar in ITRs, and PAN applications will no longer be applicable.

3. Buy-back of shares

As of October 1, buyback of shares will be subject to shareholder-level taxes, much like dividends. This will result in a higher tax burden for investors. Additionally, the shareholder's acquisition costs of these shares will be taken into account when calculating any capital gains or losses.

The Bombay High Court has dismissed the petition by Hindustan Unilever against an August 2024 Assessment Order for a tax demand of Rs 962.75 crore, the company has informed stock exchanges.

Shares of Hindustan Unilever are lower by over a percent in early trade on September 25.

The company had filed a writ petition in the High Court challenging the Assessment Order dated August 23, 2024, and the subsequent demand notice. The tax demand was raised against HUL over non-deduction of TDS while making remittance payment for an acquisition from GSK Group entities.

HUL now has 15 days to file a stay application before tax authorities against the fresh order to be passed by the Assessing Officer, in which the company can make 'appropriate prayers', relating to the penalty. "The Hon’ble Court, has however, allowed the Company’s contentions on the facts and law to be kept open," the HUL statement added.

The court has also advised the tax department not to enforce any demand recovery till any stay application is disposed of.

After the revision in monetary limits for filing appeals in direct and indirect tax cases in the Union Budget 2024-25, the Supreme Court on Tuesday struck off 573 direct tax cases where the tax effect is less than Rs 5 crore, the Ministry of Finance said in a statement on Tuesday.

The Finance Ministry said the measures are expected to “significantly reduce the burden of tax litigation and expedite the resolution of tax disputes” in alignment with the government’s efforts to promote ‘Ease of Living’ and ‘Ease of Doing Business’.

“The CBDT and CBIC had issued necessary orders to enhance the monetary limit for filing appeals in their respective domains.

Are income-tax returns of individuals confidential?

The matter has come up after Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (Sebi), and her husband, Dhaval Buch, said their income-tax details had been accessed fraudulently.

'Shockingly, our income-tax returns clearly have been obtained by adopting fraudulent means and illegally.

'This is a clear breach of not only our right to privacy (which is a fundamental right) but also a violation of the Income Tax Act,' the couple said in a statement.

Experts say disclosing an individual's income-tax returns is tantamount to violating the person's fundamental right to privacy as recognised by the Constitution.

"According to Section 8(1)(j) of the Right to Information Act, such disclosure is prohibited unless it is proven that the information serves a larger public interest that overrides the individual's right to confidentiality," said Sonam Chandwani, partner, KS Legal & Associates.

"The Income Tax Act, 1961, further enforces this protection under Section 138, which restricts access to tax-related information except under specific circumstances defined by law," Chandwani explained.

The Union finance ministry on Thursday notified the Direct Tax Vivad Se Vishwas Scheme, 2024, which will come into effect on October 1.
This scheme will allow taxpayers to settle appeals, writ petitions, and special leave petitions pending in the Supreme Court, high courts, and appellate tribunals before the cutoff date of July 22.

Though the scheme’s operational date has been announced, the final date for the scheme is yet to be determined.

The scheme states if a taxpayer has a direct tax appeal pending before a commissioner, tribunal, high court, or Supreme Court, they can choose not to litigate and instead settle the appeal by paying the full tax amount, thereby waiving any interest and penalties. This applies to cases where the taxpayer has filed an appeal.

The scheme was brought for the first time in 2020, to facilitate settling direct tax appeals pending till January 31 that year, with the Commissioner of Income-Tax (Appeals), the Income Tax Appellate Tribunal, high courts, or the Supreme Court. At that time 483,000 appeals were pending, with Rs 4.96 trillion locked in these disputes.

Multinational companies (MNCs) using various outfits in India or engaging people to promote, operate and grow their businesses from the Indian market will have to pay tax attributable to such setups even if these MNCs report losses in their global balance-sheets.

This was laid down by a three-judge bench of the Delhi High Court in a ruling which would impact several MNCs using liaison office, subsidiary, or a fixed place like a hotel room --- arrangements which are considered as 'permanent establishment' or PEs in tax parlance --- to meet customers, negotiate prices, and market products and services.

The ruling, pronounced on September 19, was in response to a petition by the UAE-based Hyatt International Southwest Asia which had a fixed place or PE in India at the premises of Hyatt Regency hotel in Delhi.

"The fact that a PE is conceived to be an independent taxable entity cannot possibly be doubted or questioned," said the ruling, adding that the source state (i.e, India in this case) cannot be deprived of its right to tax a PE and this is not dependent upon the overall and global financials of an entity.

The deadline to submit the tax audit report on the e-filing ITR portal for specific taxpayers is September 30, 2024. However, with only 12 days left, the ITR e-filing portal is experiencing numerous glitches and issues when it comes to uploading tax audit reports. Several chartered accountants and tax professionals have raised concerns about this matter with ET Wealth Online and on social media, stating that they have been unable to upload the tax audit report on the e-filing ITR portal since September 18, 2024.

"With the tax audit report filing deadline of September 30, 2024, fast approaching, taxpayers and professionals are facing significant challenges due to persistent glitches on the Income Tax Department's website. As the deadline looms, the portal has been experiencing increased traffic, leading to slowdowns and technical issues that are causing widespread frustration," said CA Deepak Chopra, Chairman of the Direct Tax Committee of the Karnataka State Chartered Accountants Association (KSCAA).

What exactly is the issue that is preventing tax audit reports from being uploaded on the ITR e-filing portal?
The main concern lies with uploading the tax audit report. Chopra informed ET Wealth Online that the issue pertains to, "Audit report attachment upload issues. The portal is simply not accepting the uploaded PDF files of balance sheet, profit and loss, etc."

Anita Basrur, Partner, Sudit K. Parekh & Co. LLP told ET Wealth Online, "On September 18, 2024, the ITR portal was not operational the entire day and uploading could happen only late at night. Such snags put tremendous pressure on the tax auditor as well as the assessee."

The Income Tax Department has raised the minimum threshold for filing appeals in tax disputes, streamlining the process for cases brought before the Income Tax Appellate Tribunal (ITAT), high courts, and the Supreme Court. According to a recent circular by the Central Board of Direct Taxes (CBDT), appeals can now be filed only if the disputed tax amount exceeds Rs 60 lakh for ITAT, Rs 2 crore for high courts, and Rs 5 crore for the Supreme Court.

Previously, in 2019, the thresholds were set at Rs 50 lakh for ITAT, Rs 1 crore for high courts, and Rs 2 crore for the Supreme Court. The revised limits are applicable to all cases, including those related to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). Additionally, the CBDT has directed the withdrawal of pending appeals in the Supreme Court, high courts, and tribunals that fall below these new thresholds.

This decision is part of the government's ongoing efforts to manage litigation effectively. The CBDT emphasized that appeals should not be filed solely based on the tax amount involved; instead, they should be evaluated on the merit of each case. The objective is to reduce unnecessary litigation and offer taxpayers more certainty regarding their income tax assessments.

The Centre’s direct tax collection collections, net of refunds, rose about 16% on year to Rs 9.92 lakh crore till September 15, 2024 in the current financial year, sources said.

The direct tax receipts till September 15 were 45% of the FY25 target of Rs 22.07 lakh crore, broadly in line with annual trends.

Given that the going growth rate is higher than the required rate of growth was 12.8% to achieve the FY25 target, direct tax receipts is expected to exceed the target of Rs 22.07 lakh crore by a decent margin.

Gross direct tax collections, before refunds, stood at Rs 11.94 lakh crore till September 15 of FY25, up 21% on the year.

Direct tax refunds rose 65% to Rs 2.02 lakh crore till September 15 of the current financial year.

The slower pace of spending despite buoyant revenues will likely rein the fiscal deficit below 4.9% of GDP in the current financial year.

Spending on the new or revamped schemes like Pradhan Mantri Awas Yojana-Gramin (PMAY-G) and Urban (PMAY-U), scheme for the productization of Indian technology and employment-linked incentives will likely materialise in the second half of 2024-25.

Litigation with the tax department is often a last resort for businesses due to its resource-intensive nature, prolonging uncertainty and diverting focus from core business operations. The introduction of Vivad Se Vishwas (VsV) 1.0 was a milestone in resolving longstanding tax disputes, providing a much-needed breakthrough for taxpayers and the government alike.

Before VSV 1.0, a staggering 4.83 lakh direct tax appeals were pending across various appellate forums—from the Commissioner (Appeals) and ITAT to the High Courts and the Supreme Court—locking up an immense Rs 4.96 trillion in unresolved disputes. VSV 1.0 successfully resolved 1.46 lakh (30%) of these appeals, recovering Rs 0.54 trillion (11%) for the government - an admirable achievement.

Despite this success, over 5.44 lakh appeals are still pending at the Commissioner (Appeals) level alone, presenting an urgent need for action. The total direct tax disputes pending have multifolded to the tune of Rs 10.40 trillion, which is a staggering 5.6% of India’s GDP. VSV 2.0, while primarily focused on resolving these disputes, offers businesses a compelling reason to opt for settlement beyond tax implications. The following non-tax considerations highlight why businesses might choose to cut short litigation under VSV 2.0: