Income Tax Returns: Know about Original, Revised, Belated, and Updated Returns

The Finance Bill 2022 has introduced the new provision in respect of Updated Income Tax Return under the Income Tax Act. There already existed a few concepts such as Original Income Tax Return, Revised Return & Belated Return.

Original Return

Original Return is a valid return filed within the due dates specified in the above table is called an original return.

Revised Return

When an assessee successfully files his return but subsequently realises he has either missed some information or has not disclosed the information completely or any other reason for which he wishes to file his return again, is known as a revised return. The due date for filing the revised return is before the end of the relevant assessment year.

Belated Return

An assessee does not file his return within the timelines prescribed in the income tax act but files it after the due date is referred to as a belated return. The due date for filing a belated return is on or before the end of the relevant assessment year.

Updated Return

Section 139 of the Act is related to the provisions for filing of Income Tax returns by taxpayers.

Sub-section (1) of section 139 of the Act casts responsibility on the taxpayer to furnish a return within a definite time period or up to a particular date, that is, the due date which as per this section means for an assessee who is a company or a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force, it is 31st day of October of the assessment year; for an assessee who is required to furnish a report under section 92E, it is the 30th day of November of the assessment year; and for any other assessee, it is 31st day of July of the assessment year.

Alternatively, sub-section (4) of section 139 of the Act facilitates filing of a belated return after the expiry of the due date, if such return is furnished before 3 months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. Similarly, sub-section (5) of section 139 of the Act provides the taxpayer an opportunity to revise the return filed under sub-section (1) or sub-section (4) in case of any omission or wrong statement, after the due date, which is to be filed 3 months before the end of the assessment year or before the completion of the assessment, whichever is earlier. Hence, the object of section 139 of the Act is to give reasonable time to the taxpayer to file a correct statement of his income within the duration specified under the Act.

This provision provides an additional time of approximately 5 months to an individual assessee, 2 months to a company/auditable case, and 1 month to an assessee who enters into an international transaction or specified domestic transaction respectively, in a financial year to file a belated or revised return. This additional timeline for filing a revised/belated return may not be adequate when we factor in utilization of huge information and data available coupled with the “nudge approach” that motivates the taxpayer towards the desired objective of voluntary tax compliance, starting with the filing of correct tax returns.

It has been proposed to introduce a new provision in section 139 of the Act for filing an updated return of income by any person, whether he has filed a return previously for the relevant assessment year, or not. The proposal for updated return over a period longer than that is provided in the existing provisions of Income Tax Act would on the one hand bring the use of huge data with the IT Department to a logical conclusion resulting in additional revenue realization and on the other hand, it will facilitate ease of compliance to the taxpayer in a litigation free environment.

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