ITR filing: Did you miss the extended January 15 deadline? You can still file 'Updated' returns

Tax-payers who miss ITR filing due dates can file updated returns, subject to multiple conditions

Despite the Income Tax (I-T) department having extended the due date for filing belated income tax returns or revising them to January 15, 2025, many tax-payers are likely to have to missed the bus.

However, they can still file 'updated returns' by March 31, 2027 for the assessment year 2024-25 (financial year 2023-24). This however will come with penalties and restrictions.

Another chance to ensure tax compliance

Filing updated returns is a relatively new flexibility, which was announced in Budget 2022. Section 139(8A) allows an updated return to be filed by a tax-payer even if the person has already filed the original, belated or revised return for the relevant assessment year. This option allows taxpayers to rectify errors or include additional details that were missed in the original ITRs, and thus avoid penalties or litigation.

If you missed the original (July 31, 2024), belated (December 31, 2024) and the extended (January 15, 2025) deadlines this year, you can file returns for 2023-24 (assessment year 2024-25) by March 31, 2027. Similarly, if you failed to file your ITR for the financial year 2021-22 (assessment year 2022-23) or wish to rectify errors, you can submit updated returns by March 31, 2025.

You need to enter all the details in a specified form—ITR Form U—for filing an updated return. In addition, you will have to specify the reason behind the need to file an updated return. For instance, missing the original due date, wrong choice of income head, errors in disclosed income figures in the original returns and so on.

Also read: Revised, belated and updated income tax returns: Do you know the difference between them?

Be aware of the restrictions, penalties

You cannot file an updated return to lower the tax liability in the original return and claim refunds. That is, if you want to revise your returns to show lower income or set off your losses against any gains, you will not be able to do so. Likewise, if any search, survey or assessment is underway, you cannot file updated returns.

"Besides paying the tax due and interest, if any, you will have to cough up a penalty of 25-50 percent on the tax and interest due, if any," says Kuldip Kumar, Partner, Mainstay Tax Advisors. Therefore, the penalty will be 25 percent of the aggregate tax and interest payable if the updated return is filed within 12 months from the end of the relevant assessment year. If it is filed within 24 months from the end of the assessment year, the penal rate is much higher at 50 percent.

"Do note that if your returns are under scrutiny or you have already received an intimation or demand, then you cannot avail of this flexibility to file updated returns," says Mumbai-based chartered accountant Chirag Chauhan.