The provision for filing updated returns was introduced in the Finance Act 2022 when Finance Minister Nirmala Sitharaman announced the updated return facility wherein taxpayers can file updated returns to rectify errors or omissions.
Taxpayers who want to update their income tax returns of previous years can file updated returns before March 31. Although you can file updated returns anytime but it should be within two years of the end of the respective assessment year. This means that those who want to update their returns for assessment year 2022-23 or financial year 2021-22 will have to file updated returns before March 31, 2025. The provision of filing updated returns was introduced in the Finance Act 2022 when Finance Minister Nirmala Sitharaman announced the facility of updated returns, in which taxpayers can file updated returns to correct errors or omissions. Apart from this, it was introduced on payment of tax.
Why updated returns are necessary
The two major reasons for introducing updated returns were to avoid litigation and encourage voluntary taxation. When tax officials detect tax evasion, the matter goes through a lengthy process of litigation. To prevent this, the Finance Ministry allowed taxpayers to file an updated return by paying the additional tax that they failed to pay when it was due. When it was launched in 2022, the maximum time limit was 2 years. In Budget 2025, this time limit has been extended to 48 months.
Which deadlines are expiring on 31st March?
Taxpayers can file updated returns for any previous year such as FY 2021-22 and 2022-23, but for FY 2021-22, the last date is March 31, 2025. It can be filed by any taxpayer in any case except in certain exceptional circumstances. A person can file an updated return even if he has previously filed a return of loss under section 139(3) for the relevant assessment year, but the updated return cannot be a tax return of loss.
