As a result of the Finance Bill 2025, Section 143(1) of the Income-tax Act, 1961 has undergone significant changes. A new provision has been introduced that allows for the cross-verification of inconsistencies in income tax returns (ITR), improving the process of ITR processing.
The income tax department, via the identification of discrepancies between the assessment years will be able to rectify the precision of tax assessments.
The initial processing of the taxpayer’s income tax returns is controlled under section 143(1) of the Income Tax Act, 1961. The tax department, before issuing an intimation, is allowed to make certain specified modifications to the return under this clause. Among such amendments are the rectification of the returns’ mathematical problems, the rectification of wrong statements that are apparent from the given data in the return.
Revisions of IT Section 143(1)
By permitting the tax authorities to identify discrepancies between the existing return and the furnished returns in the earlier assessment years, a new level of complexity has been added by the Finance Bill 2025 to the tax returns processing.
From this, the officials can validate the taxpayers’ asserted data against their earlier filings, discover inconsistencies and ensure the precision in tax returns and disclosures, reduce mistakes, and feasible misreporting to enhance tax compliance.
A taxpayer who does not furnish the related figures in their existing return till now claimed a credit on their earlier return.
It is expected that the same amendment will rectify the tax assessments integrity via easing the return processing system and guaranteeing that previous tax filings do not clash with current claims.
