Updated Itr: Deadline to File Updated Returns for Fy21 is March 31. Check How to File
Taxpayers won’t be asked to pay a penalty or additional fee to fill the ITR-U. However, they will have to pay an additional tax as per Section 140B of the Income Tax Act.
Taxpayers must file the updated ITR (ITR-U) by March 31, 2024, for the AY 2021-22, which is for financial year 2021. ITR-U is defined under Section 139(8A) of the I-T Act. It can be filed within two years from the end of the relevant assessment year. The government introduced the concept of updated returns in the Union Budget 2022.
Who should file ITR-U?
There is a time limit for filing ITR-U. Those taxpayers who either filed their ITR (whether on time, belatedly, or even a revised return) or have not filed their ITR for an assessment year can file their return document with an updated return within 24 months from the end of the relevant assessment year. It is to be noted that ITR-U cannot be filed to claim a refund of tax paid.
Therefore, taxpayers who have missed filing their returns for FY2020-21 or want to update them with additional income can do the same now till March 31.
When can an ITR-U be filed?
An ITR-U can be filed under certain conditions,
> Original return went missing
> Some deadlines for belated and revised returns were missed
> To correct undeclared income
> When the taxpayer chose the wrong head of income
> To rectify taxes paid at incorrect rates
Additional tax
Taxpayers won’t be asked to pay a penalty or additional fee to fill the ITR-U. However, they will have to pay an additional tax as per Section 140B of the Income Tax Act.
If the ITR-U is filed within 12 months from the end of the relevant assessment year, a 25% additional tax on the tax dues is applicable.
If filed within 24 months, the additional tax increases to 50%.
Better than I-T dept scrunity
Filing an ITR-U on time (before 24 months) helps taxpayers in correcting their errors. This would ultimately help them in reducing tax liabilities and penalties. It would also save them from getting notices from the I-T department, undergo scrutiny or an audit in the future. Failure to submit tax returns by the end of the relevant AY can result in a fine of up to Rs 10,000.
“It is also an opportunity for individuals to declare any income that might have been missed due to oversight. In short, it helps avoid any further legal tax notices and disputes,” Alay Razvi, partner, Accord Juris LLP told Business Standard.
Filing updated ITR
To file an updated return, taxpayers must use the ITR forms notified for the respective assessment year along with the newly introduced form ITR-U.
One should note that the tax payable for an updated return includes the total income tax liability, encompassing tax payable, interest, late filing fees, and additional tax.
The net tax liability is then calculated by subtracting TDS/TCS/advance tax/tax relief from the total income tax liability.
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