File updated ITR to reduce risk of scrutiny, penalties

Remember, ITR-U can't be used to lower tax liability by claiming missed refunds

- BINDISHA SARANG

 The deadline to file an updated income-tax return (ITR-U) is March 31, 2024, for the assessment year 2021-2022 (FY21). The option to file an ITR-U gives taxpayers an opportunity to amend their past returns and ensure compliance with the tax laws.

In the past few weeks, some taxpayers have received notices due to discrepancies between the returns filed by them and the information available with the Income-Tax (I-T) Department.

"Go through these notices carefully. If you discover any missed tax payments, definitely opt for filing an ITR-U by including such income in it. Otherwise, you might receive further notices from the I-T Department for income that has escaped assessment," says Ankit Jain, partner, Ved Jain & Associates.

ITR-U is defined under Section 139(8A) of the I-T Act. There is a time limit for filing ITR-U. "The taxpayer is allowed to file ITR-U within two years or 24 months from the end of the relevant assessment year (AY). Therefore, the due date for filing ITR-U for AY 2021-22 (FY21) is March 31, 2024," says Adithya Reddy, an international tax lawyer. ITR-U can be filed only once in a year.