An updated return can be filed by a person even after the expiry of time limits specified for the filing of a belated return or revised return of income. Return can be filed irrespective of the fact whether he has earlier filed an original, belated, or revised return for the relevant assessment year or not.
Can updated return be a loss return?
The updated return should not be a return of loss. In updated return one can raise his income but he shall not reduce the income or increase the loss. In no case income should fall below the already declared income. Therefore the updated return shall not increases the loss, or increases the refund or decreases the tax liability.
Where a search has been initiated against a person under Section 132 or books of account or assets etc. are requisitioned or survey has been conducted under section 133A , he shall not be eligible to file an updated return for the assessment year relevant to the previous year or any assessment year preceding to such assessment year. In case when the survey is conducted for TDS related matter, he can file the updated return.
Updated return can’t be filed for the year for which assessment or reassessment or recomputation or revision is pending or has been completed.
Assessee should update or revise his succeeding assessment years return in line with existing updation. For example in AY 2020-2021 in original return he declared loss. Therefore in Assessment year 2021-2022 he will naturally set off the loss brought forward from his earlier year i.e 2020-2021. Suppose for AY 2020-2021, if he updates the return by reducing his loss which was originally filed by him, the reduced loss impact shall be given for AY 2021-2022 by filing updated return or revised return.
Time Limit:
Effective date of updated return is fro, 01-04-2022, and the time limit provided for filing an updated return is 24 months from the end of the relevant assessment year.
For example: In the financial year 2022-23, a person can file an updated return for AY 2020-21 and AY 2021-22.
Remember- If you file updated return once for one assessment year, then you can’t file the updated return again for that assessment year (one time option for that assessment year).
Form Type :
Updated return can be filed in form ITR-U.
Tax liability & Penalty Clause:
1. Any additional tax from the additional declared income shall be paid along with interest under section 234A, 234B, 234C and fee under section 234F.
2. There will be additional tax shall be equal to 25% of the aggregate of tax and interest payable by a person on the filing of the updated return where such return is furnished after the expiry of the due date of filing of belated or revised return but before completion of a period of 12 months from the end of the relevant assessment year.
3.Where the updated return is furnished after the expiry of 12 months from the end of the relevant assessment year but before completion of the period of 24 months from the end of the relevant assessment year, the additional tax payable shall be 50% of the aggregate of tax and interest payable.
Under the Income-tax Act, a penalty ranging from 50% to 200% of the tax amount can be imposed in case of under-reporting of income or misreporting of income. Further, failure to furnish a return may also attract fines and prosecutions. A taxpayer who opts to file the updated return and discloses additional income, can eliminate or mitigate the aforesaid penal consequences related to the additional income disclosed.
Author Bio
Article is Excellent and very informative. Thanks for publishing.