Non-audited income tax return (ITR) filing deadline has passed; those who missed the deadline must file their returns by the final ITR filing date of December 31, 2022. Some taxpayers may discover financial information when completing this year’s ITR that ought to have been included in their prior ITRs. The federal government created the Income Tax Return – Updated (ITR-U) for these taxpayers, which enables a taxpayer to comply with their tax obligations without encountering legal difficulties. Nirmala Sitharaman, the finance minister, made a statement on it when she unveiled the federal budget in February 2022.
Read More:-Senior citizens can earn nearly 8% returns on Tax Saver FDs – Compare interest rates
Speaking on ITR-U, Aarti Raote, Partner at Deloitte India said, “ITR-U is the tax return form in which taxpayers can file tax returns for assessment year two years prior to the current assessment year i.e. taxpayer can file an updated return for AY: 2020-21 in FY: 2022-23 to offer to tax additional income. Thus an updated income tax return gives a chance to the tax payer for coming clean to the authorities if they have missed filing a tax return in the earlier year or have missed reporting some income. One would need to pay an additional income-tax of 25 percent if the return is filed within 1 year and gets enhanced to 50 percent.”
Read More:-PM Kisan 12th instalment: When is next instalment expected? check eligibility
“You can file ITR-U for FY 2019-20 by 31st March 2023 and so on for subsequent assessment years. Only one ITR-U can be filed for each assessment year. The government is giving the facility through ITR-U to voluntarily disclose any income which was unaccounted for and come clean after paying an additional 25 per cent / 50 per cent tax of the amount of income missed to be reported. According to the reports, taxpayers have started using the facility and about 1 lakh ITR-U have been filed by now,” said Archit Gupta, Founder & CEO at Clear.
Read More:-SC gives finance ministry 30 more days for opening of GST portal
ITR-U was introduced by the Union government for the benefit of taxpayers so that they can comply with their tax obligations without running afoul of the law, said CBDT Chairman Nitin Gupta in a statement to PTI on the programme.
“We have got around 1 lakh returns… (under the ITR-U). The taxpayer may have paid additional tax or they may be a new filer. Around ₹28 crore worth tax collection has been done under this scheme so far,” Nitin Gupta of CBDT said adding, “This is a provision for taxpayers to come forward and pay taxes rather than face the consequences of penalty or any other legal action under the income tax law.”
The ITR-U form, which can be filed within two years of the end of the applicable assessment year, requires taxpayers to provide justification for updating their income, such as a previously unfiled return, income that was not reported accurately, the selection of the incorrect heads of income, or a reduction in a carried-forward loss.
