Budget 2022: Govt proposes measures to deter tax evasion, cut litigation. Check details

Unio Budget 2022: Underlining the existing ambiguity, Sitharaman said that set off, of losses, are brought forward against undisclosed income detected in search operations to avoid payment of tax.

The government proposals related to the direct taxes will further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation, Union finance minister Nirmala Sitharaman said on Tuesday while presenting the budget for the fiscal year 2022-23. In order to increase deterrence among tax evaders, Sitharaman proposed to provide no set off, of losses, against undisclosed income detected during search operations.

Union budget 2022: The government proposed measures to deter tax evasion, cut litigation. (PTI file/For representative purposes only)

Underlining the existing ambiguity, Sitharaman said that set off, of losses, are brought forward against undisclosed income detected in search operations to avoid payment of tax.

“It has been observed that in many cases where undisclosed income or suppression of sales etc. is detected, payment of tax is avoided by setting off, of losses,” the finance minister said.

“In order to bring certainty and to increase deterrence among tax evaders, I propose to provide that no set off, of any loss shall be allowed against undisclosed income detected during search and survey operations,” she added.

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Sitharaman also proposed new measures to reduce litigation involving identical issues in order to save time and resources. The litigation will be reduced by restricting the filing of a further appeal if the question of law is identical to a question is identical to the one pending in appeal before the jurisdictional High Court or Supreme Court. The filing will be deferred till such question of law is decided by the jurisdictional High Court or the Supreme Court.

Budget 2022: Govt proposals on income tax, corporate tax, NPS, digital assets