ITRs can Only be Updated Once in an Assessment Year

According to a government official, a taxpayer will be allowed to file only one revised return every assessment year. CBDT Chairman J B Mohapatra, speaking at a CII event, stated that the purpose of this provision is to assist persons who have truly missed filing their taxes.

According to Mohapatra, such taxpayers “may only file one revised return for one assessment year.”

The Budget 2022-23 allows taxpayers to alter their ITRs within two years of filing, subject to payment of taxes, to address any discrepancies or omissions.

If the revised ITR is filed within 12 months, an extra 25% of the due tax and interest must be paid, while the rate rises to 50% if it is filed after 12 months but before 24 months from the end of the relevant Assessment Year.

However, if a prosecution is started by issuing a notice for a specific Assessment Year, taxpayers will not be able to use the amended return benefit for that year.

Furthermore, if a taxpayer submits a revised return but fails to pay the additional taxes, the return will be deemed invalid.

Currently, if the I-T Department discovers that the assessee has lost out on some income, it goes through a lengthy adjudication procedure, but the proposed idea will restore trust in the taxpayer.

“To allow taxpayers to fix such errors, I’m proposing a new provision that allows them to file an updated return after paying additional tax. Within two years following the end of the relevant assessment year, this revised return can be filed “In her Budget statement for 2022-23, Finance Minister Nirmala Sitharaman stated.