Forgot to include your foreign income or saving bank account interest in the income tax return? Did you not share the capital gain statement with the chartered accountant before filing the tax return? Then the Finance Minister has proposed under the Union Budget 2022-23 to allow an updated return facility.
Making amends
An individual can use this facility to pay certain tax based on the income that was omitted from the tax return that has been filed. One can file an updated return within two years from the end of the assessment year.
But with the speed of processing of returns under Jhatpat Processing Scheme, many assesses have received tax notice for income that was not reflected based on the Annual Information Statement. It remains to be seen whether one can declare the income mentioned in the tax notice under updated returns.
Paras Savla, partner at KBP and Associates, says, “It remains to be seen the rate of tax that would be applicable on the income reflected in the updated return. But this move will enable ease of collecting taxes and also save time and energy involved in litigations.”
But if there has been a search on the individual or his office and undisclosed income is found, then they wouldn’t be allowed to set off that income under the updated return.
But, keep in mind that you will have to pay additional 25 percent or 50 percent as additional tax on the tax and interest due on the additional income that is furnished.
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