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Income Tax Return filing big update! Taxpayers can update ITRs only once in an assessment year, says CBDT Chairman

By Jessica

New Delhi: A taxpayer would be permitted to file only one updated return for an assessment year, a government official said on Wednesday.

Speaking at a CII event, CBDT Chairman J B Mohapatra said the intent of this provision is to help people who have genuinely missed out on filing his/her returns.

Such taxpayers “can file only one updated return for one assessment year”, Mohapatra said.

To correct any discrepancy or omissions, the Budget 2022-23 has permitted taxpayers to update their ITRs within two years of filing, subject to payment of taxes.

An additional 25 per cent on the due tax and interest would have to be paid if the updated ITR is filed within 12 months, while the rate will go up to 50 per cent if it is filed after 12 months, but before 24 months from end of relevant Assessment Year.

However, if a prosecution proceeding is initiated by issuing notice for a particular Assessment Year, taxpayers cannot avail updated return benefit in that particular year.

Also, if a taxpayer files an updated return and do not pay the additional taxes then the return would be tendered invalid.

Currently, if the I-T Department finds out that some income has been missed out by the assessee, it goes through a lengthy process of adjudication, and the new proposal would repose trust in the taxpayer.

“To provide an opportunity to correct such errors, I am proposing a new provision permitting taxpayers to file an updated return on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year,” Finance Minister Nirmala Sitharaman had said in her 2022-23 Budget speech. 

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