Those taxpayers who want to updated their income tax return of previous two years can file an updated return before March 31. Although you can file the updated return anytime but it must be done within two years of the end of the relevant assessment year.
This means those who want to update their return of assessment year 2022-23 or financial year 2021-22 must file an updated return before March 31, 2025.
The provision of filing updated return was introduced in Finance Act 2022 when Finance Minister Nirmala Sitharaman announced the facility of updated return wherein taxpayers can file an updated return to correct mistakes or omissions. This was introduced on the payment of additional tax.
Two of the key reasons for introducing updated return were avoiding litigation and encouraging voluntary taxation. When taxmen find out tax evasion, the case undergoes a lengthy process of litigation. To avoid this from happening, finance ministry allowed tax payers to file an updated return by paying the extra tax which they missed paying when it was due.
In 2022 when it was launched, the maximum time frame was 2 years. In Budget 2025, this timeline was extended to 48 months. .
Which deadline is expiring on March 31?
Taxpayers can file an updated return for any of the previous years such as FY 2021-22 and 2022-23 but March 31, 2025 is the last date for FY 2021-22.
In what circumstances can taxpayers file an updated return?
It can be filed by any taxpayer in any case barring some exceptional circumstances. One can file an updated return even if s/he has furnished a return of loss under section 139(3) earlier for the relevant assessment year, but the updated return can not be a tax return of loss.
When can an updated return not be filed?
There are a number of scenarios when an updated income tax return can not be filed. These include:
I. when total income leads to smaller tax liability
II. When it is leading to tax refund or a higher refund
III. When a survey has been conducted, or search is already initiated against the assessee
IV. When tax department has seized or requisitioned documents.