Filing income tax returns is of utmost importance as you can avoid added interest, and penalties and portray a good image before the Government and lenders ( in case you apply for a loan). Accounting and tax compliance companies always recommend that you need to be vigilant in filing the tax years every year as a responsible taxpayer.
During filing income tax returns, human errors might happen like mentioning the wrong head of income, Incorrect reporting of Income, selecting the wrong tax rate, or even you forgetting to file the income tax return itself.
Now there is no reason to worry, as the Income-tax department is allowing you to correct/ file your income tax return after the due date.
The Government of India introduced a new form- ITR-U for filing updated income tax returns. This provision seeks to reduce the extended adjudication timelines and is based on the self-assessment of the taxpayers and will definitely be beneficial in the long term for accounting and tax services.
Updated Income tax return
An updated income tax return is filed when your income was not reported correctly or you had chosen the wrong heads of income, or there was a reduction of carried forward loss, there was a reduction of unabsorbed depreciation, or there was a wrong rate of tax applied or there is a reduction of tax credit u/s 115JB/115JC the income tax return itself was not filed.
Unlike the revised income tax provision, you will be able to file an updated ITR only once. You can file an income tax returns for the financial year 2019-2020 and 2020-21.
If the updated ITR is filed within 12 months, an additional payment of Tax 25 % on the tax and interest due needs to be paid. Additional tax payment will go up to 50 % if the ITR is filed after 12 months but before 24 months from the end of the relevant Assessment Year. In addition to this late filing, the penalty would also apply.
Updated ITR cannot be filed in the following cases:
- If search or survey or prosecution proceedings are initiated against the taxpayers for the relevant assessment year.
- The updated return is a return of the loss.
- The updated return is reducing the income tax liability from the return filed earlier.
- The updated return result increases the refund.
- The AO has information against such person under the Prevention of Money Laundering Act or Black Money (Undisclosed Foreign Income and Assets) and Tax Act or Benami Property Transactions Act or Smugglers and Foreign Exchange Manipulation Act and the same have been reported to the assessee.
What is the difference between updated and revised income tax returns?
- What is the difference between updated and revised income tax returns?
- If you have an additional tax liability, then you need to file an updated income tax return. A revised return has no such limitations.
- If you have an additional tax liability, then you need to file an updated income tax return. A revised return has no such limitations.
As an accounting and tax compliance services consultancy in Pune, Digilekha recommends you be aware of the various tax filing norms noted down by the Indian government. We would be happy to assist you in your journey toward filing the right income tax returns. Contact us on 727678478 or email us your requirements at office@digilekha.com
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