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SECTION 139 (8A) - UPDATED INCOME TAX RETURN

Now is the golden opportunity to file the previous income tax returns.

·       Do you miss filing your income tax for the last two years?

·       Have you shown more or less income in ITR?

So now you can file your income tax return for the last two years

Advances in automation, technology, and artificial intelligence have provided the government with detailed information that has led to the belief that taxpayers should be given extra time to voluntarily file their properly updated income tax returns. The new section 139 (8A) of the Union Budget 2022 provides for appropriate updated returns minimizing potential litigation.

CBDT inserts Rule 12AC to notify the income tax return form for filing updated return u/s 139(8A) – Notification 48/2022 dated 29.04.2022.

When can an updated return be filed under 139 (8A)?

Anyone can file an updated return whether the original return or the late return of the revised return has been filed or not. This will allow the taxpayer to file the appropriate tax return if the tax liability assessment is payable for an extended period of 24 months from the end of the year. An updated return with proof of tax payment as required by Section 140B.

Note: Updated returns under this section can be filed only once for the assessment year. This means that an updated return cannot be updated once it has been filed.

When can an updated return not be filed under 139 (8A)?

If the updated return is affected, the updated return cannot be filed

^ Decrease in previously declared tax liability.

^ Increase in previously filed return claims.

^ This loss is a refund or an increase in the previously declared loss.

Who is not eligible to file an updated return under 139 (8A)?

The following taxpayers will not be eligible to file updated returns for the assessment year

^ If a search has been started for that assessment year under 132.

^ If books of account or property have been requested for that assessment year under 132A.

Note 132. or 132A and notice for the same if any other person's account books or property are searched or demanded, if money, bullion, jewellery or valuables, goods, account books or documents belonging to you have been confiscated or demanded have been issued.

^ If surveyed under 133A for that assessment year. Note: If the survey to check TDS / TDS compliance for that assessment year was conducted iby133A (2A), the assessee will be eligible to file an updated return.

^ If any proceedings are pending for assessment or revaluation or recalculation or revision of income or have been completed for that assessment year.

^ If any suit has been filed under case XXII for that assessment year.

^ If any action is pending or information is received as per the agreement laid down under 90 or 90A, the taxpayer has been informed.

^ If the AO has the relevant information and it has been communicated to the assessee for that assessment year

^ Smugglers and Foreign Exchange Manipulators (Confiscated Property) Act, 1976 or

^ Anonymous Property Transactions Prevention Act, 1988 or

^ Prevention of Money Laundering Act, 2002 or

^ Imposition of Black Money (Undeclared Foreign Income and Property) and Tax Act, 2015

What is the time limit for filing updated returns under 139 (8A)?

An updated return under 139 (8A) may be filed within twenty-four months from the end of the relevant assessment year.

Note: Income tax return 139 (1) or 139 (4) as per revised income tax return or late income tax return under 139 (5) should have expired.

What are the benefits of filing an updated return?

^ Updated returns can be filed over an extended period of 24 months.

^ This is likely to reduce the number of potential lawsuits that may otherwise arise.

^ The tax payment is likely to be less than the undeclared income or income tax evasion assessment proceedings.

How much additional tax will have to be paid for filing an updated return?

A new section 140B has been added which provides for additional tax payable on filing of updated returns.

The additional tax will be payable

^ 25% of total tax and interest if paid in the first 12 months from the end of the relevant AY.

^ 50% of the total tax and interest payable if paid after the expiry of 12 months but within 24 months from the expiry of the respective AY.

Calculation of tax payable with updated returns

Particular                                                                                       Amount (Rs.)

Total tax on income                                                                                 XXXX

Less: Advance Tax                                                                                  (XXX)

Less: TDS                                                                                              (XXX)

Less: TCS                                                                                              (XXX)

Less: Self-assessment tax                                                                      (XXX)

Less: 89/90 / 90A / 91 (if applicable)                                                         (XXX)

Less : Tax credit under 115JAA / 115JD                                                    (XXX)

Tax Payable                                                                                            XXX

Add: 25% / 50% extra tax payable                                                            XXX

Total tax payable with additional tax                                                     XXX

Note: For simplicity, tax figures include interest, cess and surcharge if applicable.

Note: Delay in payment of tax will result in interest payable under 234A, 234B and 234C.

Note: Penalty for delay in submission under ITR 234F will be applicable only if it is not filed under Return 139 (1).

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