Updated Return: File an Updated ITR with the Finance Act 2022
The Finance Act 2022, introduced subsection (8A) in section 139 of the Income Tax Act, enabling the filing of an updated return. Under this provision, taxpayers can file an updated return by paying additional tax within two years from the end of the relevant assessment year. This measure was proposed by the union government to give taxpayers an opportunity to correct any omissions or mistakes in estimating their income for tax payment.
The announcement of this provision was made by the Union Finance and Corporate Affairs Minister, Nirmala Sitharaman, during the presentation of the union Budget for the financial year 2022-23. Sitharaman highlighted that the new provision would repose trust in the taxpayers and eliminate the need for a lengthy adjudication process if the income is found to be missed out by the assessee. She emphasized that it is a step towards voluntary tax compliance.
Features of Updated ITR
The provision of filing an updated return comes with the following features:
- Allows filing of an updated return on payment of additional tax.
- Enables the assessee to declare any income missed out earlier.
- Can be filed within two years from the end of the relevant assessment year.
Who Can File an Updated ITR?
According to Income Tax India, the provision allows any person to file an updated return, irrespective of whether they have already filed the original, belated, or revised return for the relevant assessment year or not. However, there are certain situations where filing an updated return is not allowed.
An updated return cannot be filed if:
- It is a return of a loss.
- It results in lower tax liability determined based on the original, revised, or belated return filed by the assessee.
- It results in or increases the refund due based on the original, revised, or belated return filed by the assessee.
How to File an Updated ITR
To file an updated ITR, you can follow these steps:
- Offline: Download the ITR-U form from the Income Tax Department website and fill it carefully, correcting all errors or omissions. Attach relevant documents such as proof of income, deductions, and exemptions. Pay any outstanding taxes.
- Online: Use the e-filing website of the Income Tax Department to file the form. Log in to your account, select the ITR-U form, and start filing it.
It is always recommended to consult with a tax advisor if you are unsure whether you need to file an updated ITR.