Individuals will be able to update their income tax returns (ITR) within two years of the end of the relevant assessment year by paying a 25-50 percent additional tax on interest, as suggested in Budget 2022.
Individual taxpayers who have missed the deadline to file an amended income tax return will benefit from this. However, the fine print in Budget documents suggests that some taxpayers will be unable to revise their tax returns.
Individual taxpayers will not be permitted to use this facility if the amended return results in a lower total tax burden, income tax refund, or increase in income tax refunds for the most recent income tax return filed (original/filed), according to the budget memorandum.
Similarly, ITRs for any year pending or finished by the income-tax department for assessment, reassessment, recomputation, or revision of income will not be eligible under this new rule.
According to the Budget Memorandum, the proposed sub-section (8A) of section 139 will not apply if the updated return is a loss return or has the effect of reducing the total tax liability determined based on return furnished under sub-section (1), subsection (4), or subsection (5), or results in a refund or increases the refund due based on return furnished under sub-section (1), subsection (4), or subsection (5), of such person under the Act for the releasable property.
If: –– (a) a search has been initiated under section 132 or books of account, other documents, or any assets have been requisitioned under section 132A in the case of such person, or
(b) a survey has been conducted under section 133A, other than subsection (2A) of that section, in the case of such person, such person shall not be eligible to furnish an updated return under the proposed sub-section (8A) of section 139, or
(c) a notice has been issued to the effect that any money, bullion, jewelry, or valuable article or thing seized or requisitioned under section 132 or section 132A in the case of any other person belongs to that person, or
(d) a notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains too.
This clause applies to the assessment year preceding the year in which the search, survey, or request is begun, as well as the two assessment years preceding such assessment year.
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