Discover a Second Chance: Update Your Income-Tax Return (ITR) for FY 2022-23

If you missed the December 31, 2023, deadline for filing your Income-Tax Returns (ITRs) for the financial year (FY) 2022-23 or assessment year (AY) 2023-24, there’s still hope to rectify errors and file the Updated Income-Tax Return (ITR-U).

The Income-Tax portal, enhanced by the Central Board of Direct Taxes (CBDT), streamlines the electronic filing of revised ITRs for FY 2022-23 or AY 2023-24.

In the Union Budget 2022, the government introduced the ITR-U form for updating ITRs. ITR-U allows taxpayers to correct omissions or errors on their ITRs up to two years from the end of the relevant AY to keep their ITRs up to date.

The ITR-U form is an option for individuals who have not filed their ITR or incorporated inaccurate entries while filing their ITR.

Leveraging the provisions of Section 139(8A) of the Income-Tax Act (ITA), 1961, taxpayers can rectify errors or updates in their original return without facing legal action for incorrect information. A taxpayer has the opportunity to update the ITR within two years.

The calculation of these two years is considered from the end of the year in which the original ITR was filed. For example, for AY 2023-24, if a taxpayer missed the revised or belated return filing window, they can file an ITR-U after the end of the assessment year, i.e., March 31, 2024, but within two years from there, which is March 31, 2026.

Regardless of whether a taxpayer has filed an original, belated, or revised ITR or has completely missed filing the ITR in a specific FY, they can still benefit from the ITR-U form.

However, note that the ITR-U form cannot be filled in cases where an updated return has already been filed, for claiming a refund, for filing a nil return, and when an updated return results in lower income tax liability.

If the updated ITR is filed within 12 months from the end of the relevant assessment year, the taxpayer needs to pay additional taxes of 25% of the aggregate tax and interest due. This additional amount increases to 50% if the ITR-U is filed after 12 months but before 24 months from the end of the relevant AY.

To file an ITR for both years, ensure you are registered on the e-filing portal. Good news – there is no penalty for filing an ITR-U form. However, be aware that an additional tax will be levied under Section 140B of ITA. Don’t miss this opportunity to set things right!