Taxpayers can now file updated income tax returns for 2020-21, with the Central Board of Direct Taxes (CBDT) amending the rules to implement a scheme announced in the union budget for FY23 and notifying the form for it, showed an official order.
The facility of updating tax return within two years of the end of the relevant assessment year is applicable for returns to be filed in future also.
In the Income-tax (Eleventh Amendment) Rules, 2022 notified on Friday, the CBDT said this facility for updating tax return is applicable for the assessment year starting 1 April 2020 and subsequent assessment years and have to be filed in form ITR-U, which has to be verified either by digital signature or by electronic code depending on the class of tax payer. Those requiring tax audits have to use electronic signature.
CBDT said that the tax payer filing an updated return has to show the reasons for the same. The form shows options such as not having filed the returns earlier, income not reported correctly or wrong heads of income chosen. Also, options including reduction of carried forward loss and reduction of unabsorbed depreciation and use of wrong tax rate are given.
The tax payer also has to specify whether the return is being updated within a period of upto 12 months or within 12-24 months from the end of the relevant assessment year. The rules show the form and manner of updating the return.
This facility of filing return after the end of the assessment year is available irrespective of whether a return has already been filed or not.
The government believes that this facility would, on the one hand, bring use of huge data with the IT Department to a logical conclusion resulting in additional revenue realization and on the other hand, facilitate ease of compliance to the taxpayer in a litigation-free environment.
The facility of updating tax return within two years of the end of the relevant assessment year is applicable for returns to be filed in future also.