The deadline for filing Income Tax Return or ITR has passed one month ago and those who have failed to do so within the due date are required to file their ITR before or on December 31, 2022. And while filing the ITR for this year, some taxpayers may have noticed financial information that should have been mentioned at the time of the previous year’s ITR filing. So as a second chance to correct their mistakes to the taxpayers, the Government has introduced ITR-U or Income Tax Return – Updated.
Income Tax Return Update or ITR-U To Correct The ITR Filed In Previous FY
Income Tax Return Update or ITR-U lets the taxpayers conveniently “comply with their tax responsibilities without getting into hassles of the law.”
“Finance Minister Nirmala Sitharaman made an announcement in this regard while presenting the union budget in February 2022”.
For more clarity read what experts say:
Aarti Raote, Partner, Deloitte India, regarding ITR-U said, “ITR-U is the tax return form in which taxpayers can file tax returns for assessment year two years prior to the current assessment year i.e. taxpayer can file an updated return for AY: 2020-21 in FY: 2022-23 to offer to tax additional income. Thus an updated income tax return gives a chance to the taxpayer for coming clean to the authorities if they have missed filing a tax return in the earlier year or have missed reporting some income. One would need to pay an additional income tax of 25 per cent if the return is filed within 1 year and gets enhanced to 50 per cent.”
Archit Gupta, CEO at Clear, said, “You can file ITR-U for FY 2019-20 by 31st March 2023 and so on for subsequent assessment years. Only one ITR-U can be filed for each assessment year. The government is giving the facility through ITR-U to voluntarily disclose any income which was unaccounted for and come clean after paying an additional 25 per cent / 50 per cent tax of the amount of income missed to be reported. According to the reports, taxpayers have started using the facility and about 1 lakh ITR-U have been filed by now.”
Nitin Gupta, CBDT said, “We have got around 1 lakh returns… (under the ITR-U). The taxpayer may have paid additional tax or they may be a new filer. Around ₹28 crores worth of tax collection has been done under this scheme so far”.
“This is a provision for taxpayers to come forward and pay taxes rather than face the consequences of penalty or any other legal action under the income tax law,” he added.