The Ministry of Finance, through the Central Board of Direct Taxes (CBDT), has introduced a significant amendment to Rule 12(3) of the Income-tax Rules, 1962. Effective from April 1, 2024, this change offers a simplified method for individuals and Hindu Undivided Families (H.U.F.s) to furnish their tax audit reports. The amendment allows the use of Aadhaar OTP or other Electronic Verification Codes (E.V.C.) instead of the previously mandatory digital signature. This article delves into the details of this amendment and its implications for taxpayers.
Key Highlights of the Amendment
Scope of the Amendment: The amendment specifically applies to individuals and H.U.F.s whose accounts are required to be audited under section 44AB of the Income-tax Act. It does not extend to firms, L.L.P.s, companies, trusts, or other entities.
Methods of Furnishing Tax Audit Reports: According to the amended rules, individuals and H.U.F.s can now furnish their tax audit reports using the following methods:
- Electronically under digital signature.
- Transmitting the data electronically in the return under electronic verification code (E.V.C.), which includes Aadhaar OTP.
Implementation Date: The new rules will come into force on April 1, 2024, as per the notification G.S.R. 83(E) dated January 31, 2024.
Benefits of the Amendment
Ease of Compliance: This amendment simplifies the compliance process for individual taxpayers and H.U.F.s. It eliminates the mandatory requirement for a digital signature, making it easier for taxpayers to furnish their tax audit reports using Aadhaar OTP or other E.V.C. methods.
Enhanced Accessibility: The use of Aadhaar OTP and other E.V.C. methods enhances accessibility, particularly for those who may not have access to digital signatures. This change is expected to benefit a significant number of taxpayers, facilitating a smoother and more user-friendly tax filing process.
Alignment with Technological Advancements: By allowing the use of E.V.C. methods, the amendment aligns with the advancements in digital verification technologies. This ensures a more secure and efficient process for taxpayers to verify and submit their tax audit reports.
Acknowledgments
The amendment to Rule 12(3) is a result of continuous requests and feedback from various stakeholders, including professionals and taxpayers. The Income Tax Department deserves commendation for adhering to these requests and introducing this taxpayer-friendly change.
Conclusion
The amendment to Rule 12(3) of the Income-tax Rules, 1962, marks a significant step towards simplifying the tax compliance process for individuals and H.U.F.s. By allowing the use of Aadhaar OTP and other E.V.C. methods, the CBDT has made it easier for taxpayers to furnish their tax audit reports. This change is expected to enhance accessibility and ease of compliance, benefiting a large number of taxpayers in India.