I-T returns can be updated in 2 yrs to correct any errors

Taxpayers who have made errors in filing their income tax returns can now file an updated return within two years from the end of the assessment year. This is meant to reduce litigation, but will not provide any additional refund to the taxpayer.

After filing a return, some taxpayers may realise that they have made omissions or mistakes in estimating their income for tax payment. They can file an “Updated Return” on payment of additional tax. This updated return can be filed within two years from the end of the relevant assessment year.

This will avoid the lengthy process of litigation if the department finds out that some income has been missed out by the assessee. With this proposal, there will be a sense of trust reposed in the taxpayer to declare the income that may have been missed out.

“With the government having a lot of information on individual transactions, the chances of litigation are higher,” said Shalini Jain, tax partner, People Advisory

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The assessee shall be liable to pay the additional tax together with any interest and fee payable. However, this will not result in an increase in refunds. Further, if a search or survey has been initiated against the assessee or bullion, jewellery, valuables or documents have been already seized, the taxpayer will not be eligible to file the updated return.