Income Tax Deadline: Today is the last day to file updated return for fiscal 2021. Check details here

If you have already filed your income tax return for financial year 2020-21 and realised that there were a few mistakes or omissions in that then today is the last date to file an updated return to incorporate the changes.

Notably, the provision of filing an updated income tax return (ITR-U) was announced in Budget 2022 by Finance Minister Nirmala Sitharaman when she said that an updated return gives a one-time window to taxpayers to correct any discrepancy or omissions within two years of filing.

Although for assessment year 2021-22 (i.e., financial year 2020-21), the last date to file an updated return is today i.e., March 31, 2024, whereas the taxpayers can also file an updated return for the subsequent assessment years of 2022-23 and 2023-24 also.

Additional tax

It is worth mentioning that in order to file an updated income tax return, one has to pay additional tax and interest.

Let’s suppose the updated return pertains to assessment year 2021-22, the additional tax would be 50 percent of aggregate of tax and interest.

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And in case the updated return is being filed for any of the years 2022-23 or 2023-24, the additional tax component would be 25 percent of aggregate tax and interest.

When can you file an updated return?

The updated return is filed under section 139(8A) of the Income Tax Act. There could be a number of reasons to file an updated income tax return.

These are some of the key reasons:

A. When taxpayer failed to declare income correctly that led to lower income than actual.

B. When taxpayer received tax notice under section 133(6) for certain information about claim of deductions/ exemptions regarding which suitable explanation is not made available by the taxpayer.

C. When taxpayer missed the belated return deadline

D. If taxpayer chose the wrong head of income or income tax was, instead, paid under the wrong slab.

E. If there is requirement to reduce the carried forward loss or unabsorbed depreciation.

F. In case the taxpayer claimed wrongful deductions or exemptions .

It is also worth noting that the updated return cannot be filed to file loss, or to claim the refund, or when updated return leads to lower tax liability or even when search proceedings have been started against the taxpayer or even when survey was conducted under section 133A.

In a recently released FAQs, income tax department stated that the updated return is treated as the latest return and therefore, prevails over other applicable provisions.