The Income Tax Department recently announce a new form for filing of Updated Income Tax Returns. A new concept of updated return was introduce in Budget 2022.
As it allows taxpayers to amend their ITRs within two years from the end of the relevant assessment year.
The new provision is expect to help taxpayers who often commit errors or make some omissions while filing ITR.
Important Things You Should Know About Updated Income Tax Return Filing
- In the form for Updated ITR, taxpayers are require to declare the purpose for filing as well as the amount of income to be taxed in the updated return.
- Taxpayers are not require to provide a break up of the income reported in the ITR (Updated).
- Taxpayers can now use the new form ITR-U to file the updated income tax return for financial years 2019-20 and 2020-21.
- Certain taxpayers are require to file the Updated ITR electronically using a digital signature or an electronic verification code.
- The taxpayer has to file the ITR Forms of the relevant assessment year and submit it with the new ITR-U.
- The ITR-U has to be file within two years of the end of the relevant assessment year.
- For doing this, taxpayers are also require to provide reasons for updating the ITR.
The reasons for filing ITR-U may be many, including previous return not file, income not reported correctly , wrong heads of income choses, reduction of a carried forward loss etc.
- A taxpayer has to pay an additional 25% tax and interest due if updated ITR is file within a year (12 months) from the end of the relevant assessment year.
- A taxpayer has to pay an additional 50% tax and interest due if updated ITR is file after a year (12 months) but before 24 months from the end of the relevant assessment year.
- The return will be consider invalid if the taxpayer fails to pay the additional taxes.
- You cannot file ITR-U if the overall tax due is to be reduce and losses to be offset against income, for refund or for increase in refund amount.
- A taxpayer can file an Updated ITR only once for a Financial Year.
- So, it should be done carefully.
