Current income tax laws allow an assessee to correct an error made while filing a return. While one should take utmost care to avoid any mistakes, it may still happen particularly with those filing ITR at the last minute.
Section 139(5) of income tax allows a taxpayer to file the revised return of income if he/she discovers any omission or error in the original return.
Can I correct past ITR errors? What if you had filed the ITR for the assessment year 2021-22 within the due date and discovered an error now? Can you still revise the ITR of the assessment year 2021-22?
The answer is no. According to income tax law, the revised return can be filed only three months before the relevant assessment year or before completion of the assessment, whichever is earlier.
For the assessment year 2021-22, the government had extended the deadline to file a revised return to March 31, 2022. That window has gone.
However, there still is an option to file an updated return as per Section 139(8A), said Naveen Wadhwa, Deputy General Manager at Taxmann.
“The Finance Act, 2022 has introduced the concept of updated return to allow a longer duration for an assessee to file the return of income. An updated return can be filed within 24 months from the end of the relevant assessment year (subject to certain conditions). An updated return can be filed even after the expiry of time limits specified for the filing of a belated return or revised return of income,” Wadhwa told CNBC-TV18.com.
So, what do the rules say in relation to filing an updated return?
All taxpayers are eligible to file an updated return. However, such a return cannot be filed in the following circumstances:
(a) If an updated return is a return of a loss;
(b) In case an updated return results in lower tax liability;
(c) In case an updated return results in or increasing the refund;
(d) In case of a search initiated against the assessee;
(e) Where books of account or assets etc. are requisitioned in case of the assessee;
(f) In case a survey is conducted against the assessee;
(g) Where documents or assets are seized or requisitioned in case of any other person belonging to the assessee;
(h) In case an updated return has already been filed;
(i) In case assessment is pending or completed;
(j) In case of a person or class of persons as notified by the CBDT.
Is there any fee or penalty levied upon taxpayer furnishing updated return?
No. A penalty or fee is not levied upon a person who wishes to furnish an updated return. However, you will be required to pay an additional tax in accordance with Section 140B of the income tax act.
“The additional tax is equal to 25 percent of the aggregate of tax and interest payable by a person on the filing of the updated return, where such return is furnished after the expiry of the due date of filing of belated or revised return but before completion of a period of 12 months from the end of the relevant assessment year,” said Wadhwa.
“Where the updated return is furnished after the expiry of 12 months from the end of the relevant assessment year but before completion of the period of 24 months from the end of the relevant assessment year, the additional tax payable is 50 percent of the aggregate of tax and interest payable,” he added.
Further, a fee under Section 234F is charged if such person didn’t furnish a return of income for that assessment year for which he is furnishing an updated return.
Is there any separate form for filing of updated return?
No. A taxpayer is required to furnish an updated return in those ITR forms which were notified for the respective assessment year for which an updated return is to be furnished. Such an ITR form is to be filed along with the newly notified form ITR-U.
The Central Board of Direct Taxes (CBDT) notified Form ITR-U to furnish an updated return.