Updated ITR deadline approaching: Avoid 50% additional tax by filing before March 31, 2025 Filing by March 31, 2025, incurs a 25% additional tax plus interest, while filing later attracts a 50% additional tax
The Income Tax Department has issued an advisory urging taxpayers to file their updated Income Tax Return (ITR-U) promptly for lower penalties and to reduce additional financial burden before March 31, 2025. Filing an updated return allows taxpayers to voluntarily disclose any unreported income or correct errors in previously filed returns.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
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To encourage voluntary compliance, the government in 2022 had introduced the option for taxpayers to file updated I-T returns (ITR-U) up to 2 years from the relevant assessment year by paying additional income tax.
Also read: 60%, 70% penal income tax payable when filing updated income tax return in 3rd, 4th year from end of AY: Budget 2025
In the current assessment year (2024-25) till February 28, 4.64 lakh updated ITRs have been filed and taxes of Rs 431.20 crore have been paid, Minister of State for Finance Pankaj Chaudhary said in a written reply in the Lok Sabha, PTI reported.
In AY 2023-24, over 29.79 lakh ITR-Us were filed and Rs 2,947 crore additional taxes were paid, as per PTI.
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— IncomeTaxIndia (@IncomeTaxIndia) An updated return (ITR-U) can be filed by any taxpayer, including individuals, businesses, or other entities, except in certain specified cases.
Income tax department posted on social media X: “Filing ITR -U now= 25% additional tax +Interest. Filling after March 31 , 2025 =50%additional tax + interest
Please file updated return of Income as per provisions u/s139(8A) of IT Act, 1961.
File by March 31, 2025 to avail benefits of lower Additional tax at 25% and interest.”
Also read: When to use Capital Gains Account Scheme to save income tax if you made long-term capital gains after selling land, property, equities, etc.?
What is an updated return?
An updated return is a type of tax return that allows taxpayers to file their returns with more time. It is intended to encourage voluntary tax compliance. An updated return can be filed by any person, except in certain circumstances, regardless of whether they have previously filed an original, belated, or revised return for the relevant assessment year. The filing of an updated return is optional for taxpayers.Time limit for filing an updated return
A taxpayer can file an updated return within two years from the end of the relevant assessment year. However, the additional tax liability varies depending on the timing of the filing:Before March 31, 2025: 25% of the tax and interest due if filed within the first 12 months of the extended period.
After March 31, 2025: 50% of the tax and interest due if filed between 12-24 months of the extended period
This ensures that taxpayers declare their correct income sooner rather than delaying compliance as delayed filing increases interest on unpaid taxes.
Latest rule from April 2025
Finance Minister Nirmala Sitharaman has proposed an extension of the current 24-month period for filing an amended return to 48 months (4 years) from the end of the relevant assessment year to further promote voluntary tax compliance.While the government has provided a longer window to file updated tax returns to report incomes not disclosed earlier, this comes with payment of higher amounts of additional (penal) taxes on this undisclosed income.
How much more will you have to pay on filing an updated Income Tax Return?
A taxpayer is required to pay 25% of additional tax (penal tax) on aggregate of tax and interest payable if the updated ITR is filed within 12 months from the end of the assessment year. This additional tax (penal) rate is 50% if the updated ITR is furnished after 12 months but before 24 months from the end of the assessment year.Now, a taxpayer would be required to pay 60% as additional/penal tax if the updated ITR is furnished after 2 years but before 3 years from the end of the relevant assessment year. This rate would increase to 70% if the updated ITR is furnished after 3 years.
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This story originally appeared on: India Times - Author:Faqs of Insurances
