The Finance Act of 2022 introduced the concept of updated returns to allow a longer duration for an assessee to file the return of income. 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 to update their return. One could file only one updated return for each assessment year(AY). Late filing is always associated with penalties, such as an additional 25% 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. The penalty gets enhanced 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. The total tax liability a taxpayer must pay will be Tax payable + 50% of additional tax + interest + Late filing Fees ( if applicable).
Today: December 11, 2023