Income tax: who can file, how to file, when to file an updated return

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Often people forget to file their income tax (IT) return on time or show less income on their IT return. If this is your case, you will soon be able to file an updated IT declaration. This is important to avoid receiving a notice from the IT department and paying interest and penalties later. For this, the Finance Law 2022 introduced the provision of filing the updated declaration and the IT department recently notified the ITR-U form to file the updated declaration for the financial year 2019-20 and beyond.

When can a taxpayer file an updated return?

The updated declaration can be filed in the following cases:
* If the taxpayer filed the computer return under Section 139(1) and later discovered that he reported no income or reported income less than the correct amount.
* If the taxpayer filed a late return under Section 139(4) and later discovered that he showed no income or showed income less than the correct amount.
* If the taxpayer has already filed the revised return under Section 139(5) within the time limit provided by the Income Tax Act and later discovers that he has shown no income or has indicated an income lower than the correct amount.
* The taxpayer failed to file his computer return.
The updated return cannot be filed if there is no additional tax payable, an increase in tax refund/loss or a decrease in tax payable. It is also relevant to note that the taxpayer can only file one updated return for an assessment year and it cannot be revised later.

Deadline for filing the updated declaration

The updated declaration can only be filed after the end of the assessment year and within 24 months thereafter. Therefore, the updated tax return can be filed for the 2020-21 assessment year (2019-20 fiscal year) until March 31, 2023. And the same cannot be filed if the IT department has already started or completed the assessment process for an individual The assessment year.

How to file an updated return

You can file the ITR-U form by going to the income tax portal incometax.gov.in. The taxpayer must select the reason for filing the ITR U, i.e. (a) a previously unfiled return (b) income not reported correctly (c) wrong heads of income chosen (d) a reduction in loss carried forward (e) reduction in unabsorbed losses amortization (f) reduction in tax credit u/s. 115JB/115JC (g) incorrect tax rate (h) others, etc. It must be filed either (a) electronically with digital signatures; or (b) electronic verification code, as applicable. Unlike other IT reporting forms, no detailed income breakdown is required.
Additional tax under updated return
The ability to file the updated return is not available free of charge and there is an additional tax liability in addition to the ordinary IT payable by the taxpayer under normal IT law provisions. The amount of additional tax depends on when the updated declaration form is filed:
*Updated return filed up to the expiration of 12 months from the end of the assessment year – In this case, the additional tax payable will be 25% (ordinary tax + interest due).
*Updated return filed between 12 months and 24 months from the end of the assessment year – In this case, the additional tax payable will be 50% (ordinary tax + interest due).

The RTI U is a facility that the taxpayer must exercise after having duly understood the implications. For this, he can take the help of a chartered accountant or a tax consultant to avoid any discrepancies in the late declaration, as it cannot be revised after filing. To avoid getting in trouble with the IT department, it is always safer to file the IT declaration correctly and on time.

Disclaimer: Opinions expressed are for informational and educational purposes only. Nothing contained in this document constitutes professional advice. Before taking any steps related to your taxation, it is always advisable to consult your tax advisor or your chartered accountant. The author or publication will not be liable for any loss suffered by any person directly or indirectly based on this article.


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