Beneath the income tax act, a new return is an updated concept, this would draw voluntary compliance instead of following a longer adjudication process. No matter, if an income tax return would be furnished for a specific assessment year, a taxpayer is qualified to furnish a new return for that assessment year within 24 months from the finish of that assessment year to rectify the errors, or omissions, performed during furnishing the original return or to file the information of income for the concern where no would be filed before, in the present times the prior year towards which an updated income tax return could be furnished would be FY 19-20.
The assessee needs to furnish more tax, over the normal rate of tax, interest, and subjected late fees. For instance when the updated return would be furnished now for the finishing year March 2021, another tax of 25% on the aggregate of tax along with the interest and the late fees needed to be furnished.
if the return is furnished on or after April 1, 2023, for the identical year FY 20, another tax of 50% on the aggregate of tax along with the interest and the late fees needed to get furnished. The same window of the updated income tax return is available up to 36 months from the finish of the fiscal year.
Through the additional taxes, the total tax on the income can be grown by 66%, however, the penal proceedings from the department would be prevented, via this compliance. A straight tax rate similar to it also acts as an alert for the assessee for the earlier and precise tax filing. Late filing or wrong filing would draw the higher taxes.
The Big Difference Between Updated and Revised ITR
An updated return would not be similar to an income tax revised return. An original return could be revised, even if there is a rise in refund or decrease in the tax liability as per the outcome of the return. While an updated return could not furnish if there is a rise in the loss of the return. No more tax is there towards the revised returns, while the updated return arrived with the additional taxes.
Elaborating the provisions of the updated returns via two examples would be effective. Arvind has furnished his IT return for the fiscal year ending March 2021 on August 30, 2021.
But he comes to know that the amount of Rs 90,000 interest earned would not come in the tax return. Could he furnish his updated return? Yes, he needs to furnish the subjected taxes and furnished the return on or prior to March 2024.
Bhaskar would not furnish his IT return for FY 2020-21. He needs to notify a loss of Rs 2 lakh on the Future & Option (F&O) trading. Does he need to file? Any return with the losses can not be filed. Christopher furnished an IT return for FY 21 but lost to claim the interest on the housing loan. Would he furnish his return and claim more taxes furnished as a refund? No. any updated return that produces an outcome in a refund would not get furnished. Similar to that when an investigation is executed via dept, then in these cases an updated return could not get furnished.
Those who are qualified to furnish UR would furnish the returns for the fiscal year ending March 2020 and next years in Form ITR-U. Beneath which the income tax act a penalty from 50 to 200 per cent would be levied for under-reporting the income or misreporting income. By furnishing the updated return and showing the other income the assessee could remove the mentioned penal outcomes.
