A Guide to Belated Returns, Revised Returns, and ITR-U
Filing Income Tax Returns (ITR) is a crucial responsibility for taxpayers in India. As the year nears its end, December 31, 2024, is the final date to submit belated and revised returns for the financial year 2023-24 (assessment year 2024-25). This guide explains the distinctions between these filing options, their implications, and how missing deadlines can lead to penalties.
Filing Belated Income Tax Returns
A belated return is filed after the original deadline, which was July 31, 2024, for the financial year 2023-24. Taxpayers who missed this deadline can still file their belated return by December 31, 2024.
Consequences of Late Filing
As per Section 139(4) of the Income Tax Act, filing a belated return incurs penalties:
- Penalty Amount: Rs 5,000, reduced to Rs 1,000 if taxable income is below Rs 5 lakh.
- Exemption: No penalty applies if income falls below the basic exemption limit of Rs 3 lakh.
However, there are certain limitations:
- New Tax Regime Default: Taxpayers filing belated returns are restricted to the new tax regime, which offers limited deductions like:
- Standard deduction of Rs 50,000.
- Employer’s NPS contribution up to 10% of basic salary.
- No deductions under popular sections like 80C, 80D, or for HRA exemptions.
- Limited Tax Savings: The extensive deductions and exemptions available in the old tax regime cannot be claimed.
Submitting Revised Income Tax Returns
A revised return allows taxpayers to correct mistakes or omissions in their originally filed ITR. As per Section 139(5), taxpayers can revise their returns multiple times within the allowable timeframe.
Key Details About Revised Returns
- Deadline: The revised return for FY 2023-24 can be filed until December 31, 2024, or before the assessment completion, whichever comes earlier.
- Restrictions: Revised returns cannot:
- Decrease the tax liability reported in the original or belated return.
- Increase the refund amount.
- Report previously unclaimed losses.
- Avoid Frequent Changes: Repeated revisions may attract scrutiny from tax authorities.
Taxpayers can revise their return even after receiving an intimation under Section 143(1). However, revisions are not allowed once the return undergoes scrutiny under Section 143(3).
Using ITR-U: The Updated Income Tax Return
Introduced in Budget 2022, the ITR-U form enables taxpayers to correct missed filings or disclosures for up to two years from the end of the relevant assessment year.
When to File ITR-U
Starting January 1 of the assessment year, taxpayers can use ITR-U to make corrections, subject to certain limitations:
- No Tax Reduction: It cannot be used to lower tax payable.
- No Refunds: Refund claims cannot be made through ITR-U.
- No Loss Adjustments: Adjustments or increases in losses are not allowed.
Final Thoughts
December 31, 2024, is a critical deadline for filing belated and revised returns for FY 2023-24. Missing this date leaves ITR-U as the only option, though it has its own restrictions. Taxpayers should ensure timely and accurate filings to avoid penalties and maximize tax benefits. Understanding these options aids in compliance and helps prevent potential complications.
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