Did you Fail to File your Income Tax Return? Find the Options Still Available Before you
When taxpayers find themselves unable to meet the Income Tax return deadline due to valid reasons, there are still options available to file their return and escape non-compliance repercussions. The Income Tax Act offers three provisions, allowing taxpayers to file their Income Tax Return (ITR) even after missing the original return deadline specified under section 139(1), commonly set as July 30 for individuals and October 31 for companies/firms.
One widely used approach is the filing of a Belated return by December 31, serving as the final opportunity for the financial year 2022-23. If individuals missed the initial deadlines on 31 July 2023 or 31 October 2023, they were expected to file their Income tax return by 31 December 2023 for filing their return for the financial year 2022-23. However, for those who have still not filed, there’s no need to worry. Two additional options exist to submit the ITR, even after surpassing the Belated ITR deadline.
This article will delve into these two alternative methods i.e., seeking condonation of delay under section 119 of the Income Tax Act and filing an Updated return (ITR-U) under section 139(8A) which provides a lifeline for taxpayers who missed their belated ITR deadline of 31 December 2023.
Seeking Condonation of Delay u/s. 119
If a taxpayer misses the deadline for filing a belated Income tax return due to valid reasons, there is another option available through the process of seeking condonation of delay under Section 119 of the Income Tax Act. This relief is offered by the Central Board of Direct Taxes (CBDT) and allows taxpayers to apply for condonation of delay, if they were unable to file or verify their Income Tax Return (ITR) on time. To initiate this process, taxpayers need to submit a request for condonation of the delay through the e-filing portal. If deemed appropriate by income tax officers, the request may be accepted, granting the taxpayer a second chance to file the ITR.
It is crucial to note that there is not a specific time limit for submitting the condonation request. However, it is advisable to file it promptly once any delay in filing or verifying the Income tax return is identified. While there is no guarantee that the condonation request will be accepted by the concerned officer, the decision rests solely with the discretion of the Income Tax Department. If the department recognizes the genuineness of the reason for the delay, it may approve the condonation request. In case the condonation plea is denied, taxpayers still have an alternative and they can proceed by filing an Updated Income Tax Return (ITR-U) under section 139(8A) to fulfil their tax obligations.
Filing Updated Return (ITR-U) u/s. 139(8A)
Filing an Updated Income Tax Return (ITR-U) under Section 139(8A) becomes a viable option if your condonation plea is rejected. Introduced in the Union Budget 2022, ITR-U allows taxpayers to rectify errors or omissions and update their previous ITR within two years from the end of the relevant assessment year. However, there’s a limitation that taxpayers can file only one updated return per year.
Section 139(8A) provides a two-year window to update your ITR, calculated from the end of the year in which the original return u/s. 139(1) was filed or supposed to be filed. ITR-U aims to enhance tax compliance without triggering legal action. Circumstances warranting an Updated Return filing include missing the original or belated return deadline, inaccuracies in reported income, selecting the wrong head of income, paying tax at an incorrect rate, or adjustments related to carried forward loss, unabsorbed depreciation, or tax credit under section 115JB/115JC.
When filing ITR-U, taxpayers must provide proper reasons, such as not filing earlier, incorrect income reporting, choosing wrong heads of income, or adjusting carried forward loss. A NIL updated return cannot be filed, but for a Nil tax return, ITR-U is an option by paying the required late filing fees under Section 234F.
The time limit for ITR-U filing is 24 months from the end of the relevant assessment year. For clarity, refer to the table below:
| Financial Year | Assessment Year | Last Date of filing ITR-U |
| 2020-21 | 2021-22 | 31 March 2024 |
| 2021-22 | 2022-23 | 31 March 2025 |
| 2022-23 | 2023-24 | 31 March 2026 |
Penalties and late fees apply as per Section 234F. For missed deadlines (July 31/October 31), the penalty is Rs 5,000, reduced to Rs 1,000 for total income below Rs 5 lakh. Interest under section 234A is levied for late filings at a rate of 1% per month on the unpaid tax amount. In the case of Updated Returns, an additional tax of 25% or 50% on the tax amount is applicable, depending on the filing timeframe. If filed within 12 months from the end of the relevant assessment year, the additional tax is 25%, thereafter, it becomes 50%.
Conclusion
Navigating these options in case of missing the filing deadlines provides taxpayers with an opportunity to rectify their mistakes to escape from any kind of noncompliance persecutions. But it is essential to act promptly and adhere to the guidelines outlined by the Income Tax Department. Understanding these options ensures a comprehensive approach to addressing late filing scenarios and maintaining compliance with tax regulations.
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