The deadline for submitting an updated income tax return or ITR-U for the fiscal year 2020-21 (Assessment Year 2021-22) was March 31, 2024. This deadline has now passed, and any errors in previously filed ITRs, misreported income, or underreporting of income cannot be rectified through the filing of ITR-U. Taxpayers who missed this deadline and have outstanding issues may face penalties of up to 200% imposed by the income-tax department if they are caught.
According to an Expert, once the deadline for ITR-U passes, taxpayers lose the option to make further corrections.
Can Non-Filing of ITR-U Lead to Jail Time?
In a recent case, the Delhi High Court sentenced a woman to imprisonment for not filing her income tax return (ITR) despite being liable to do so. While the filing of ITR-U is not mandatory, failure to file an ITR when required can result in imprisonment under tax laws. However, imprisonment is usually sought for deliberate acts of non-compliance, such as concealment of income or making false statements, rather than solely for not filing ITR-U.
An Expert explains that if taxpayers fail to respond to notices from the income-tax department regarding non-filing of ITR or mis/underreporting of income, the department may issue notices for property attachment or even seek arrest as a last resort.
ITR-U vs. Revised ITR:
Both ITR-U and revised ITR allow taxpayers to revise declared incomes, but they differ in terms of tax penalties and filing time limits. ITR-U can only be filed in specific cases and requires payment of a penalty of up to 50% of the tax evaded. In contrast, revised ITR has no penalty at the time of filing and can be submitted within nine months after the original ITR filing.
Taxpayers have around nine months after the end of the financial year to file a revised ITR. Once this window closes, there is no option to correct or rectify the return, leading to potential tax liabilities and penalties. Therefore, the introduction of ITR-U allows taxpayers to declare additional income or correct errors within 24 months from the end of the relevant assessment year.
Filing ITR-U After the Deadline:
In certain cases, individuals may be able to file ITR-U even after the deadline has passed. Taxpayers with valid reasons for missing the deadline can submit ITR-U along with a condonation form under section 119(2)(b). However, it’s crucial to file the condonation application request at the time of submitting ITR-U. Failure to do so may result in further scrutiny and potential tax implications.
Overall, missing the deadline for ITR-U filing can have serious consequences, including penalties and legal actions by the income-tax department. Therefore, taxpayers are urged to comply with tax filing requirements and address any outstanding issues promptly.
