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Revised ITR filing: What is the timeline for revising original Income Tax Return? Is there a penalty?

Date: November 30, 2023
# News

Question: Please guide on whether returns filed by individuals can be revised. What is the timeline for revising the original return filed by the taxpayer? Would revising such a return attract any penal consequences?

Answer by Dr Suresh Surana, Founder, RSM India: Section 139(5) of the Income Tax Act, 1961 (hereinafter referred to as ‘IT Act’) allows taxpayers to file a revised return of income. Such return may be filed by the taxpayer under the following circumstances:

  • The taxpayer discovers any error or omission made by them while filing their original income tax return, such as reporting incorrect income, deductions, bank details, personal information, or any other information.
  • The taxpayer realizes that he/she inadvertently omitted certain income sources or failed to include certain deductions or exemptions or missed to report and carry forward losses in his original return provided the same could have been claimed at the time of furnishing the original return.
  • The taxpayer notices that there is a mismatch in income between the original return of income and Form 26AS/AIS.

A taxpayer can revise his return on or before 31st December of the relevant assessment year i.e. on or before 9 months from the end of the financial year. Thus, with respect to Financial Year 2022-23, taxpayers can file a revised return on or before 31st December 2023 i.e. on or before 9 months from the end of the financial year 2022-23.

Further, there are no separate penalty provisions for the purpose of filing of revised return. However, there may be interest consequences depending upon the revision in income.

Also, a taxpayer may furnish an updated return of his income u/s 139(8A) of the IT Act within 24 months from the end of the assessment year (i.e. 36 months from the end of the financial year), subject to certain specified conditions. A taxpayer would not be eligible to file an updated return in case of search, survey, seizure, etc. and such return cannot be a loss return.

However, in case of updated return, the taxpayer would be required to pay additional tax u/s 140B of the Income-tax Act which would be 25% of aggregate of tax and interest payable, if such return is furnished before completion of period of 12 months from the end of the relevant assessment year.

In case such an updated return is furnished after the expiry of 12 months from the end of the relevant assessment year but before the completion of the period of 24 months from end of the relevant assessment year, the additional tax payable shall be 50% of aggregate of tax and interest payable.