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CMA Final · Direct Tax Laws and International Taxation · Different Aspects of Tax Planning

Under the Income-tax Act, 2025, a person who is required to furnish a statement of a specified financial transaction under section 508(1) fails to furnish it within the specified time. What may the prescribed income-tax authority do?

The prescribed income-tax authority may serve a notice requiring the statement to be furnished within a period not exceeding thirty days from the date of service. The ten-day period applies to reporting an inaccuracy found after filing, not to a notice for non-furnishing.

  1. AServe a notice requiring the statement to be furnished within a period not exceeding thirty days from the date of service of the noticeCorrect
  2. BServe a notice requiring the statement within a period not exceeding ten days from the date of service
  3. CTreat the statement as furnished automatically on the basis of the prior year's statement
  4. DRequire the person to furnish the statement only through the Registrar of Companies

Explanation

Section 508(7) allows the prescribed authority to serve a notice on a defaulting person requiring the statement to be furnished within a period not exceeding thirty days from service. Ten days is the period for informing about inaccuracy under sub-section (8), not for a notice on non-filing.

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