As the deadline of March 31, 2024, approaches, taxpayers are reminded of the crucial requirement to file their updated income tax return (ITR-U) for the financial year 2021 (Assessment Year 2021-22).
Failure to rectify errors in the previously filed return could result in penalties amounting to 200% of the outstanding tax.
Understanding ITR-U and Penalties:
Under Section 139(8A) of the Income Tax Act, taxpayers are granted the opportunity to amend their ITR, addressing any inaccuracies or omissions.
However, neglecting to correct these errors could lead to severe consequences, including penalties of up to 200% of the outstanding tax liability.
S., founder of Delhi’s CA firm Ravi Ranjan & Company, highlights the implementation of Section 270A,
which imposes penalties of 50% or 200% of the outstanding tax for income concealment, while Section 271 allows penalties of up to 300% for assessment years up to 2016-17.
Deadline and Revised Return Filing:
Taxpayers have a window of 24 months after the end of the relevant assessment year to file a revised return.
For those who missed the FY 2020-21 deadline, March 31 stands as the last opportunity to rectify their returns.
Who Needs to File ITR-U?
Taxpayers who have not filed their return or have omitted filing for the relevant assessment year are required to submit their return documents along with the updated return.
It’s essential to note that ITR-U cannot be utilized for claiming refunds.
Additional Tax and Conditions:
Filing ITR-U necessitates the payment of additional tax, subject to certain conditions.
The additional tax amount is typically 50% of the total tax liability, alongside interest on the revised return.
Furthermore, if the updated ITR-U, amended return, or late return is filed more than one year after the relevant assessment year’s end,
an additional tax of 25% of the total tax, plus interest, applies.
