Missed the extended 15th January ITR Deadline? Still can file your Return with ITR-U
Recently, the Income Tax Department has further extended the due date for submitting belated and revised income tax returns for the financial year 2023-24, or the assessment year 2024-25, up to January 15, 2025. Still, most taxpayers would have missed this opportunity. But in case they have missed this, it is not too late because the opportunity for compliance can be availed through the filing of updated income tax returns (ITR-U) under Section 139(8A) of the Income Tax Act.
Updated Income Tax Returns: A Second Chance for Taxpayers
The idea of furnishing updated returns (ITR-U) was introduced in Budget 2022. Under this, the taxpayers will be allowed to correct the errors or add omitted details in their original, belated, or revised returns. Taxpayers who have missed all earlier deadlines for FY 2023-24 can furnish updated returns by March 31, 2027. In addition, those taxpayers who require correcting errors in the returns for FY 2021-22 (AY 2022-23) can furnish updated returns by March 31, 2025.
To file an updated return, the taxpayer is required to fill up the prescribed Form i.e. ITR-U by giving a valid reason. Valid reasons include failure to meet the original deadline, wrongly selecting the head of income, or disclosing wrong figures of income in the previous submissions.
Updated returns are subject to certain restrictions. They cannot be filed for lowering the tax liability shown in the original return or for claiming a refund. For instance, taxpayers cannot alter their returns to decrease declared income or offset losses against gains. Additionally, if search, survey, or assessment proceedings are under way, then filing updated returns is not an option.
Penalties for Filing Updated Income Tax Returns
Filing updated returns incurs other costs. The taxpayer must pay any outstanding taxes and interest due, with a penalty additionally levied. If the updated return is made within 12 months of the end of the relevant assessment year, the penalty is 25 percent of the total tax and interest payable. The penalty goes up to 50 percent if the updated return is filed within 24 months.
In addition, an assessee cannot opt for this scheme if their returns are already under investigation or if he or she has received any intimation or demand notice from the Income Tax Department.
Want to rectifying mistakes and keep staying out of problems due to penalties and litigations, then filing updated returns is yet another opportunity that can be availed by the taxpayer. Yet, it must be done strictly in detail, knowing the exact nature of associated penalties and constraints. Through this, a taxpayer can benefit from this flexibility in abiding by such rules and timeliness in order to be within the purview of tax law.
Taxpayers are therefore urged to act quickly so that complications are further avoided, ensuring that they are able to fulfill their tax obligations.
