Income Tax Bill 2025:

March 5, 2025

In a recent development, the Income Tax Bill 2025 proposes revisions to the General Anti-Avoidance Rules (GAAR), allowing tax authorities to issue reassessment notices beyond the current time limitations.
General Anti-Avoidance Rules (GAAR)
Objective: Prevent tax avoidance through impermissible arrangements.
Authority: Tax officials can reclassify transactions as Impermissible Avoidance Arrangements (IAAs), leading to re-computation of income and tax liabilities.
Oversight: GAAR can only be invoked with approval from a High Court-led Approving Panel.
Proposed Changes in Reassessment Notices
Current Rule: Reassessment notices allowed within 5 years and 3 months if under-reported income exceeds ₹50 lakh.
New Proposal: Allows reassessment beyond this time limit if IAAs affect multiple years.
Safeguards Against Misuse
GAAR Panel decisions will serve as valid indicators of escaped income.
No pre-hearing required before issuing reassessment notices, ensuring a faster process.