Filing your income tax return (ITR) is something every taxpayer should keep on top of, but life often gets in the way.
Whether you missed the deadline or realized you made a mistake after filing, there are options available to ensure you're still in compliance with the tax authorities.
You may have heard of Belated Returns and Updated Returns, but what exactly do they mean for you, and how do they differ? Let’s break it down.
What is a Belated Return?
A Belated Return is an ITR that’s filed after the due date but before the end of the assessment year.
It’s a common scenario for taxpayers who missed the original deadline, which is usually July 31st for individuals and non-corporate taxpayers.
While missing the due date isn’t ideal, the Income Tax Act allows taxpayers to file a belated return by December 31st of the relevant assessment year.
For example, if your ITR for the financial year 2023-24 was due by July 31, 2024, but you missed it, you can still file your return until December 31, 2024, with penalties.
What is an Updated Return?
An Updated Return, on the other hand, allows you to make corrections to your previously filed return. This provision, introduced under Section 139(8A), lets you rectify any mistakes or omissions in your ITR, even after the original due date or the belated return filing date has passed.
You can file an updated return up to 24 months from the end of the assessment year. For example, in the financial year 2024-25, a taxpayer can file an updated return for the assessment years 2022-23 and 2023-24.
For example, if you missed a deduction or forgot to report some income, you can file an updated return to amend those errors—saving you from penalties or interest for incorrect filings.
Also Read: How to File Updated Return (ITR-U) Under Section 139(8A) Income Tax
Pros of Filing a Belated Return
While filing a belated return isn’t ideal, it’s better than skipping it altogether.
Here are some of the pros:
-
Avoid Penalties for Non-Filing: If you fail to file an ITR within the due date, the tax department can impose hefty penalties. A belated return helps you avoid the severe consequences of non-filing, even if it means facing a penalty for the late submission.
-
Claim Refunds: If you are eligible for a tax refund, a belated return allows you to claim it. You won't lose out on money owed to you simply because you missed the deadline.
-
Compliance: Filing a belated return helps you stay compliant with tax regulations, avoiding future complications like notices or penalties from the tax authorities.
Cons of Filing a Belated Return
That said, there are a few downsides to filing a belated return:
-
Late Filing Penalties: The government imposes late filing fees under Section 234F, which can range from ₹1,000 to ₹10,000, depending on your taxable income. This can quickly add up and reduce your refund (if applicable).
-
Loss of Certain Deductions: If you file your return late, you may miss out on certain tax deductions or exemptions under Chapter VI-A (e.g., deductions for savings under sections like 80C, 80D). These deductions can help reduce your taxable income, so missing out on them could mean a higher tax liability.
-
Restriction on Carrying Forward Losses: If you have business or capital losses, you may not be able to carry them forward to set them off against future income, which can lead to a higher tax liability in subsequent years.
Pros of Filing an Updated Return
Now, let's look at the pros of filing an updated return:
-
Rectify Mistakes or Omissions: The main benefit of an updated return is the ability to correct errors or omissions in your previously filed return. Whether it’s forgetting to report income, missing out on deductions, or correcting wrong information, the updated return ensures that your filing reflects accurate data.
-
Reduce Scrutiny: If you’ve received a notice from the tax authorities or are worried about the possibility of an audit, filing an updated return helps mitigate the risks. It’s a way to voluntarily bring your tax filing in line with the law and avoid future scrutiny.
-
No Additional Penalties for Errors: By filing an updated return, you’re allowing yourself to amend your mistakes without being penalized for them. It’s like taking a proactive step to stay compliant, which can save you from more serious penalties in the future.
Cons of Filing an Updated Return
While updated returns are helpful, they also come with certain downsides:
-
Additional Tax Liability: If you owe additional tax after filing the updated return, there’s a penalty of 25% to 50% of the tax due, depending on when the updated return is filed. This could increase your tax burden.
-
Limited Time for Filing: You can only file an updated return within 24 months from the end of the assessment year. Once that period passes, you’re no longer eligible to amend your return.
-
Cannot File if Proceedings are Ongoing: If the tax authorities have already started an assessment or scrutiny for the assessment year, you won’t be able to file an updated return. You’ll need to settle the pending issue before making any updates.
Belated Return vs. Updated Return: A Quick Comparison
| Feature | Belated Return | Updated Return |
|---|---|---|
| Filing Deadline | Before the end of the assessment year (usually December 31) | Within 24 months from the end of the assessment year |
| Penalty/Fees | Late filing penalties (₹1,000 to ₹10,000) | Additional tax liability (25%-50% of tax due) |
| Corrections Allowed | No corrections can be made after the original filing | Correct errors or omissions in the original filing |
| Claiming Refund | Yes, if applicable | Yes, if applicable |
| Carrying Forward Losse | Restricted | Allowed if corrected |
| Deductions Allowed | May lose certain deductions | Deductions can be corrected |
Stay on Track, Even When Filing Late
Whether you’re filing a belated return because you missed the deadline or an updated return to correct an error, both options come with their own pros and cons.
It’s important to weigh the benefits of staying compliant with the potential penalties. Whenever possible, it’s always best to file your return on time to avoid complications.
But if you find yourself in a situation where you need to file a belated or updated return, don’t hesitate—acting quickly can save you from bigger problems down the road!
If you're unsure, consulting a tax professional might be a good idea to ensure you're making the right choice for your financial situation.
Also Read : Penalties Under the Income Tax Act: What You Need to Know (and Avoid!)
FAQs
1. Can I file both a belated return and an updated return for the same assessment year?
No, you can either file a belated return or an updated return, but not both for the same year. The belated return is for missing the original due date, while the updated return is for correcting errors after the return has been filed.
2. What happens if I miss the deadline for filing an updated return?
If you miss the 24-month window for filing an updated return, you won’t be able to make corrections to your previous filing. This could result in higher tax liability or penalties for any mistakes in the original return.
3. Are there any exemptions to penalties for belated or updated returns?
In some cases, if you have a reasonable cause for missing the deadline, the tax authorities might reduce the penalty or waive it. However, this is not guaranteed, and you’ll need to provide valid justification.
