ITR filing: Taxpayers who missed the deadline to file their belated or revised Income Tax Return (ITR) for the financial year 2024-25 in July 2024 were given a second opportunity to do so on Wednesday, January 15. The Central Board of Direct Taxes (CBDT) extended the deadline to January 15 to give these taxpayers some flexibility to reconcile their records before submitting their belated/revised ITRs.
According to Sections 139(4) and 139(5) of the Income-tax Act, 1961, resident individuals who have missed the initial filing deadline of July 31, 2024, or need to make amendments to their returns because of errors, are required to file their returns by January 15 in order to prevent any further repercussions.
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What are the implications of missing the January 15 deadline?
Failure to submit your ITR by the January 15, 2025 deadline may result in the inability to revise your AY2024-25 returns, potential notices from the Income Tax Department, and additional penalties imposed by tax authorities.
Taxpayers who fail to meet the January 15 deadline will still be able to submit their returns for AY 2024-25, but they will face a penalty of up to Rs 10,000 for filing late.
Non-compliance with this deadline could result in receiving notices from the Income Tax Department, facing penalties for default, and having their undisclosed income scrutinised.
Additionally, the CBDT has recently extended the deadline for taxpayers to calculate their tax dues under the Vivad Se Vishwas Scheme to January 31, 2025. Taxpayers who submit declarations under this scheme by the new deadline will be required to pay 100% of the disputed tax demand. Those who file after February 1, 2025, will face a higher payment of 110%.
ITR-U or Updated Income Tax Return
The form ITR-U, also known as Updated Income Tax Return, allows individuals to correct errors or omissions in their previous income tax return. This form can be filed within two years from the end of the relevant assessment year. The concept of updated returns was introduced by the government in the Union Budget 2022.
Please note that filing belated or revised ITRs after January 15 is not permitted. However, individuals can use the ITR-U form to file an updated return and rectify minor errors or omissions in their original ITR. It is important to mention that ITR-U cannot be used to reduce taxes due, claim refunds, or increase losses.
For instance, if an individual filed an ITR for Assessment Year (AY) 2023-24 but missed the revised/belated return filing window, they can file an ITR-U after the end of the assessment year, i.e., 31 March 2024, but within two years from that date, i.e., 31 March 2026. It is worth mentioning that the ITR-U filing for AY 2023-24 commenced on 1st January 2024.
Under the Income Tax Act, Section 139(8A) provides an opportunity for taxpayers to amend their Income Tax Returns (ITR) within a period of two years from the end of the year in which the original return was filed. The introduction of ITR-U aims to enhance tax compliance among taxpayers without necessitating legal action.