Income Tax Return: File Your ITR-U By March 31 To Avoid 200% Penalty

Attention all taxpayers! It's that time of the year again when you need to ensure your financial records are up to date. The deadline to file your updated income tax return (ITR-U) for the assessment year 2021-22 (financial year 2020-21) is fast approaching - March 31, 2024. It's crucial to meet this deadline to avoid hefty penalties.

Understanding ITR-U:

What exactly is ITR-U, you may wonder? Well, it's a lifeline for rectifying errors made in your previously filed income tax returns. Whether it's correcting under-reported income or addressing any other mistakes, ITR-U comes to the rescue. Even if you missed filing your taxes by the due date, fret not, as ITR-U allows you to catch up.?

For example, if you submitted your tax return for the year 2023-24 but missed the chance to make any changes or file it again within the given time, you still have an option. You can file what's called an ITR-U after the end of the assessment year, which is March 31, 2024. You have two years from that date, until March 31, 2026, to do this. It's important to know that the process of filing ITR-U for the year 2023-24 began on January 1, 2024.

Deadline Alert and Heavy Penalty:

But beware, ignoring these errors can land you in hot water with the tax department. Penalties of up to 200% of the tax payable can be imposed if discrepancies are detected. According to S Ravi, Founder of Ravi Rajan & Co, a Delhi-based CA firm, the consequences can be severe if income is concealed or not reported.

Now, let's talk about deadlines. You have a window of 24 months from the end of the relevant assessment year to file ITR-U. For instance, for the financial year 2020-21 (AY 2021-22), the deadline is March 31, 2024. Dr. Suresh Surana, founder of RSM India, emphasizes the importance of meeting these deadlines to avoid unnecessary complications.

Navigating Additional Taxes

Additionally, filing ITR-U may require you to pay additional taxes based on your circumstances. The amount can vary, but typically it's around 50% of the total tax and interest payable. However, if you file after the due date but within 12 months from the end of the assessment year, the additional tax reduces to 25%.

There are instances where filing ITR-U is not permitted. For example, if it leads to a refund or increases a previously due refund, or if certain legal actions have been initiated against you. It's crucial to be aware of these restrictions to avoid any legal ramifications.

So, what's the bottom line? It's better to be proactive and rectify any errors in your tax returns before the tax department catches them. As S. Ravi advises, the Income Tax Department has various means to track down undisclosed income. Therefore, it's wise to take matters into your own hands and file your ITR-U promptly.

Remember, the deadline is looming. Don't wait until it's too late. File your ITR-U now to avoid hefty penalties and ensure peace of mind. Your financial future depends on it!

Who can't file an ITR-U?

• If you've already submitted an updated return.

• If you're filing a return showing no profit or loss.

• If you want to get back more money from your return or increase the refund amount.

• If filing a corrected return means you owe less tax.

• If the tax department is currently searching for information about you under Section 132.

• If a survey is done by tax authorities under Section 133A.

• If the tax authorities have taken away your assets, records, or books under Section 132A.

• If your tax situation is being reviewed or has already been sorted out.

• If your updated return doesn't change the amount of tax you owe (for example, if the tax you owe has already been covered by TDS credit or losses).