Understanding modified and revised income tax returns


A novel idea under the Income Tax Act is an updated return, which is a move toward voluntary compliance rather than a protracted adjudication process. Regardless of whether a return of income has been filed for a particular assessment year, an assessee has the right to file an updated return for that assessment year within 24 months of the end of that assessment year to correct errors, omissions, or mistakes made while filing the original return, or to furnish income details in cases where no return has been filed previously. The first year for which an updated return can be filed is now FY 19-20.

The catch is that the taxpayer must pay an additional tax in addition to the regular amount of tax, interest, and late fines. If the revised return is filed now for the year ending March 2021, for example, an additional tax of 25% on the total tax (including interest and late fees) must be paid.


If the return is filed on or after April 1, 2023, an extra tax of 50% on the total tax (including interest and late fines) must be paid for the same year (FY20). This amended return window is accessible for up to 36 months after the end of the fiscal year.


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The overall tax on income could rise to 66 percent as a result of the additional taxes, but through voluntary compliance, the department’s punitive actions can be avoided. A high tax rate serves as a reminder to taxpayers to file their taxes as soon as possible. Higher taxes will be levied if you file late or incorrectly.


A revised return differs from an updated return. Even if the first return results in a higher refund or losses, or a lower tax liability, it can be changed. An revised return, on the other hand, cannot be filed if it increases the loss or refunds. There are no additional taxes for the updated return, which is another significant distinction, whereas updated return always comes with additional taxes. 

It’s likely that using a few images to describe the requirements of update returns will be beneficial. On August 30, 2021,


Arvind filed his IT return for the fiscal year ending March 2021. Now he realises that an interest payment of Rs 90,000 was not included in his tax return. Is it possible for him to file a revised tax return? Yes, he must pay the required taxes and file the return by March 2024.

Bhaskar has yet to file his IT tax return for the fiscal year 2020-21. He must record a loss of Rs 2 lakh from futures and options trading. Is he allowed to file?

No, you can’t file any revised returns that result in a refund. Similarly, if the department initiates a search or survey, an amended return cannot be filed in those situations as well. 


Those who are entitled to file UR returns can use Form ITR-U to file returns for the fiscal year ending March 2020 and following years. For under-reporting or misreporting of income, a penalty ranging from 50% to 200 percent can be applied under the Income Tax Act. The taxpayer can avoid or lessen the above-mentioned penalties by filing an amended return and revealing extra income.