Deadline To File Updated Income Tax Return For FY19-20 Approaches. Here's What You Should Know

For taxpayers, the deadline to file an updated income tax return (ITR-U) for FY 2019-20 is approaching near. The last day to file an updated ITR is March 31. The Union Budget 2022 had made a proposal to allow taxpayers to file updated returns by paying additional tax for up to two years from the end of the assessment year in which the income should have been accounted for.

The Finance Act of 2022 introduced the concept of updated returns that gives more time to an assessee to file the return of income. Taxpayers who have missed reporting any income can file an ITR-U. The ITR U form was introduced for updating income tax returns which came as a rescue for those who have not filed their ITR or made inaccurate and false entries while filing their income tax returns.

What is ITR-U?

An updated income tax return or ITR-U is a form that allows taxpayers to file the ITR or to correct errors or omissions on their ITRs up to two years from the end of the relevant assessment year. Also, note that an individual taxpayer could file only one updated return for each assessment year (AY).

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Is there any time limit to file ITR-U?

The time limit for filing  ITR-U  is 24 months from the end of the relevant assessment year.

Who can file ITR-U?

A taxpayer who has made an error or omitted certain income details in original, belated, or revised returns can file an updated return.

How much additional tax do you need to pay?

It is important to note that late filing always comes with associated penalties. One would need to pay an additional 25 per cent of the tax and interest due on the income missed to be reported if the return is filed within one year from the end of the relevant assessment year. 

In fact, the penalty can go up to 50 percent of additional tax and interest due if the return is filed after one year and within two years of the relevant assessment year.

Additional tax for filing ITR

The total tax liability will come to around Tax payable + 50% of additional tax + interest + Late filing Fees ( if applicable).