Before starting with the updated ITR, let’s take small recap about what is income tax return and purpose of it,
Income Tax Return is a form which a person is supposed to submit to the Income tax department of India. It contains information about the person’s income and taxes to be paid on it during the year. Tax return allow taxpayers to calculate their tax liability, schedule tax payments or request refunds for the over payment of taxes.
As per the income tax laws, the return must be filed every year by an individual, or business that earns any income during a financial year. The income could be in the form of a salary, business profits, and income from house property or earned through dividends, capital gains, interests or other sources.
All About Updated Income Tax Return
- As of now, Income tax provisions allow taxpayers to file original return of Income with certain time limits. But the Person who fails to file Original Return has option to file belated return.Further taxpayers have benefit to file revised return to rectify mistakes, errors or omission of transactions made earlier while filing original or belated return.
- As per the Finance Act 2022 , new section has been inserted Section 139(8A) This section says that if any person has filed a return that is original, belated or revised return, they can file updated return within 24 Months from the end of Assessment year. But this includes some additional tax cost to person who avail option for updated return.
- The additional tax payable shall be 50% of aggregated tax amount and interest payable, as determined by Income tax Provisions.
- Further this section also says that updated return will not apply in case to decrease the total tax liability, or return related to any refund.
- And suppose tax payer has deposited extra tax or claimed less refund than eligible, then he is not covered under the newly inserted section provisions.
- The provision also clearly says the updated return shall be considered as defective if return is not accompanied by the proof of payment of tax.
- If such return is furnished after the expiry of 12 months from the end of relevant assessment year but before completion of 24 months from the end of relevant assessment year, the additional tax payable shall be 50% of aggregate of tax and interest payable as mentioned in the provisions of income tax.
This new amendment will take place from 1st April 2022. The forms regarding updated return are yet to be inserted and it would important to see that how many tax payers avail the benefit of this newly inserted section. In the era of income tax act this is totally a new section and hope this section is considered as beneficial from the taxpayers point of view.