Before you get into the New Year festive mode, make sure that all your income tax-related work is finished. December 31, 2022, is the last day to file the belated and revised income tax returns (ITRs) for FY 2021-22 (AY 2022-23).
Under income tax laws, an individual who has missed the last date to file an original income tax return can file a belated ITR. So a person who has not filed the income tax return on or before July 31, 2022, for FY 2021-22 (AY 2022-23) has a chance to file a belated ITR on or before December 31, 2022.
A belated ITR is filed under Section 139(4) of the Income-tax Act, 1961. However, the process of filing it is the same as filing an income tax return before the due date.
While filing a belated ITR, an individual taxpayer needs to ensure two things: Section 139 (4) in the tax return form is selected and the applicable penalty amount, penalty interest and taxes dues are paid.
Under Section 234F of the Income-tax Act, a penalty of Rs 5,000 is levied on an individual filing a
belated ITR. However, small taxpayers with a taxable income of up to Rs 5 lakh have to pay only a penalty of Rs 1,000. This late filing fee must be deposited before you start the process of filing a belated ITR.
Penal interest is applicable if any income tax dues are payable at the time of filing the belated ITR. It is calculated at the rate of 1 per cent per month if self-assessment and advance tax are due while filing.
What is the process of filing revised ITR?
A revised ITR is filed under Section 139(5) of the Income-tax Act. Here also, the process of filing is the same as filing an original ITR.
While filing, an individual taxpayer needs to ensure that Section 139 (5) is selected while filling the applicable income tax return form and the original ITR’s number must be kept handy as it needs to be quoted in the revised ITR form.
Now, what happens if taxpayers miss these deadlines too?
If taxpayers miss the last date to file belated ITRs, they can file updated ITRs. The Finance Act of 2022 has introduced the concept of updated returns 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). It can be filed even after the expiry of time limits specified for the filing of a belated return or revised return of income.
An updated income tax return can be filed only after the end of the relevant assessment year. Hence, if taxpayers do not file belated ITRs now, then they will be allowed to file an updated ITR from April 1, 2023, only.
A penalty or fee is not levied upon a person who wishes to furnish an updated return. However, they will be required to pay an additional tax in accordance with Section 140B of the Income Tax Act.
A taxpayer will be liable to pay 25 percent additional tax on the tax dues if ITR-U for FY 2021-22 (AY 2022-23) is filed within the first relevant assessment year — i.e., between April 1, 2023, and March 31, 2024. However, if the ITR-U is filed between April 1, 2024, and March 31, 2025, then 50 percent additional tax on the tax dues will have to be given.
A taxpayer must 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 will be filed along with the newly notified form ITR-U.