UPDATED RETURN – NEW CONCEPT INTRODUCED BY BUDGET 2022

UPDATED RETURN:- New facility – subsection (8A) added in section 139 –

Presently -Original return / revised return – now one more return i.e., updated return also.

Can be filed in all circumstances – (a) if the return is filed u/s. 139(1) i.e., original return in due date (b) if the return is filed U/s. 139(4) belated return (c) if revised return is filed u/s. 139(5) (d) if no return has been filed at all.

In some cases it can not be filed – (a) if the updated return is loss return (if the earlier return was loss return and updated return is also loss return – if the earlier return was income return – if no return filed earlier and updated return is first return).

(b) if the tax liability is less in updated return than tax liability in section (1),(4),(5) return.

(c) if refund arises or increases due to updated return (e.g., no refund in earlier return and refund in updated return – less refund in earlier return and more refund in updated return – updated return is first return claiming refund.

(d) assessment / reassessment / revision proceedings are started / completed.

(e) Section 132 search case – Section 132A requisition case – 133A Survey case (except TDS survey case – section 133A(2A) – not only for the search etc. year but also for earlier two assessment years.

(f) Benami property etc. many other acts related cases, information received u/s. 90 / 90A etc. from foreign, prosecution initiated.

Other – Only one updated return is permissible

Time limit – can be filed within 2 years from the end of the relevant assessment year e.g. return of AY 2022-23 could be filed up to 31/03/25.

New section 140B inserted – for payment of taxes related to updated return – (regular tax + interest + late fee) if payable + additional tax to be paid (incl surcharge and cess) – evidence regarding payment of tax U/s. 140B to be given with return –  otherwise return will be defective. Credit for prepaid taxes will be allowed.

Additional Tax – (a) no additional tax if updated return is filed before due date U/s. 139(4) / 139(5)

(b) updated return filed between 139(4)/(5) due date – 12 months from end of assessment year – additional tax = 25% of (regular tax + interest)

(c) updated return filed after expiry of 12 months from end of assessment year – additional tax = 50% of (regular tax + interest )

Benefit – Less pressure on professionals on due dates + Many peoples requires Income tax returns for loan purposes they will have the opportunity to file the return if they have lapsed.

 (applicable w.e.f. 01/04/2022)

CONSEQUENTIAL AMENDMENT IN SECTION 153 – normal Time limit for completion of 143(3) / 144 assessment – 9 months from the end of the assessment year.

Now, in case an updated return is filed – the time limit for assessment will be – 9 months from the end of the financial year – in which the updated return is furnished.