Big update for Income Tax payer’s. Taxpayers looking to revise their income tax returns from past years have until March 31 to submit updated returns. While you can technically file these returns at any time, they must be done within two years after the end of the relevant assessment year. So, if you’re aiming to update your returns for the assessment year 2022-23 or the financial year 2021-22, make sure to do it by March 31, 2025.
This option to file updated returns was introduced in the Finance Act 2022, thanks to Finance Minister Nirmala Sitharaman, who rolled out this feature to help taxpayers correct mistakes or omissions. It also comes with the requirement to pay any outstanding tax.
Why are updated returns important?
The main reasons for allowing updated returns are to reduce legal disputes and promote voluntary compliance with tax laws. When tax officials find instances of tax evasion, it often leads to a long legal battle. To sidestep this, the Finance Ministry has made it possible for taxpayers to file an updated return by paying any extra tax they missed earlier. Initially, the time limit for this was set at two years, but in the 2025 Budget, it was extended to 48 months.
What deadlines are coming up on March 31?
Taxpayers can submit updated returns for previous years like FY 2021-22 and 2022-23, but remember that for FY 2021-22, the deadline is March 31, 2025. Anyone can file an updated return unless there are specific exceptional cases. Even if someone has previously filed a loss return under section 139(3) for that assessment year, they can still submit an updated return, but it can’t be a loss return.