How to file ITRs when it’s belated, revised, updated

Income Tax Return (ITR) filing has three different due dates u/s 139(1) of Income Tax Act. The tax filing due date for all non-audit ITRs is 31 July of the relevant assessment year (AY). However, there are two exceptions. For assessees who are required to furnish report u/s 92E for international transactions or specified domestic transactions, the due date is 30 November. For companies, the due date for tax filing is 31 October. Assessees other than companies (including partner in a firm) also get time till 31 October if they are required to be audited.

The IT laws require all assesses to file their ITRs on or before the due date. But what if a taxpayer is not able to file it within the due date? Can they file it after the due date and are there any consequences to it? What if the taxpayer files the ITR before the deadline but there is an unintended mistake in the ITR furnished? Can such an ITR be revised?

All such small but important questions can be addressed by the concepts of belated return, revised return, updated return and defective return.

Belated Return

An ITR which is filed after the due date of return (31 July/31 Oct/30 Nov) is known as a belated return. Belated return is filed by the assessees who miss the original deadline but can still file their tax return.

Belated return can be filed till 31 December of the relevant AY u/s 139(4) of IT Act subject to completion of assessment. Though belated return aims at providing an additional opportunity to those taxpayers who miss the deadline due to some unavoidable reason, furnishing a belated return has three major disadvantages. First, interest at 1% per month will be charged on unpaid taxes u/s 234A. Second, late fees of ₹1,000 for incomes below ₹5 lakh and ₹5,000 for incomes exceeding ₹5 lakh is charged u/s 234F. Last, if the return of loss is submitted after the due date, many losses like capital and business losses cannot be carried forward for setting off in subsequent years.

Revised Return

If a taxpayer has filed original or belated ITR but later discovers an omission or wrong statement in it due to a bonafide mistake, they have the option to revise their tax return u/s 139(5) of the IT Act. A revised return is a kind of amendment of previously furnished return in case of any mistake or inadvertence from the side of assessee.

Revised returns can be filed till 31 December of the relevant AY, subject to completion of assessment. Interestingly, even a belated return can be revised within the time limit and a revised return can be revised again for correcting any omission or wrong statement made in the first revised return.

Updated return

The Finance Act, 2022, has introduced a new section 139(8A) as one last option to declare the real income without any concealment or understatement of income or overstatement of expenses/losses, if someone has missed the deadline to file belated or revised return. This facility can be availed even if assessee had furnished an original return. Updated return filed within 12 months from end of AY will be taxed @ 25% while any return filed after 12 months but before 24 months from end of relevant AY will be taxed @50%. But updated return comes with many restrictions as the tax department wants to ensure that there is no loss of revenue due to this extra opportunity. Updated return cannot be filed if it declares a return of loss or it decreases the total tax liability or results in refund of tax. Updated return also can not be filed if search (raid) has been initiated or survey has been conducted. Once an updated return is filed, another revised updated return for the same year cannot be furnished.

Defective return

If an ITR has not been duly filed or return is furnished with some defects, the assessment officer can declare such return as defective return. Though, with introduction of online utilities, the chances of defects have been reduced significantly, one must pay attention to any notice issued by the IT department for defective return . If return has been declared as defective and the defect is not rectified within 15 days of notice, return will be considered invalid return i.e., it will be assumed that no return was filed and interest, fine and penalties will be levied accordingly.

Kashif Ansari is an assistant professor at Hansraj College, University of Delhi.