In the Finance Bill, 2022, the government introduced the concept of ‘updated ITR’. It allows the assessee to file the ITR within 24 months of the expiry of a financial year
The last date for filing the income tax return (ITR) for 2021-22 (FY22) is fast approaching. ITR 2021-22, the last date, has been fixed as July 31, 2022, by the Central Board for Direct Taxes (CBDT). However, mistakes are bound to happen while filing the return at the last minute.
In the Finance Bill, 2022, the government introduced the concept of ‘updated ITR’. It allows the assessee to file the ITR within 24 months of the expiry of a financial year. For example, for FY21, the updated ITR can be filed by March 31, 2023.
It was introduced to allow the taxpayers to rectify their errors. The revised ITR gives a much shorter duration of three months after the expiry of the deadline. Updated ITR gives a bigger window.
Also Read | ITR 2021-22: Important documents required while filing income tax return
However, there is a catch. While updated ITR does not attract fees or penalties, the taxpayer must pay an additional tax under Section 140B of the Income Tax Act.
How much additional tax does one need to pay while filing an updated ITR?
If a person is filing the updated ITR within one year after the expiry of the due date, 25 per cent of the aggregate of tax and interest is payable.
However, if the updated ITR is filed after one year and within two years of the expiry of the last date, 50 per cent of the aggregate of tax and interest is payable.
There are no such additional taxes in the case of the revised ITR.
Key points to remember while filing the updated ITR
The updated ITR cannot be filed in the following cases:
- If an updated return adds a new ‘loss’ or ‘refund’
- If the updated ITR leads to a lower tax liability
- If the assessee has already filed an updated ITR earlier
- If the assessment of the person has already been completed
- If the CBDT notifies the person or class of persons
The form ITR-U was introduced by the CBDT to file the updated ITR