ITR deadline: Taxpayers can file updated return for last two years before March 31 – Know details here before proceeding

Taxpayers who wish to update their income tax returns for the previous two years can do so before March 31. While an updated return can be filed at any time, it must be submitted within two years from the end of the relevant assessment year.

For instance, those looking to update their return for the assessment year 2022-23 (financial year 2021-22) must file it before March 31, 2025.

The provision for filing an updated return was introduced in the Finance Act of 2022 when Finance Minister Nirmala Sitharaman announced this facility, allowing taxpayers to rectify mistakes or omissions in their returns. However, this update comes with the condition of paying additional tax.

The primary objectives behind introducing the updated return were to reduce litigation and promote voluntary compliance. When tax authorities detect tax evasion, the case often leads to prolonged legal proceedings. To mitigate this, the finance ministry permitted taxpayers to file an updated return by paying any unpaid tax.

Initially, when the provision was launched in 2022, the maximum time frame for filing an updated return was two years. However, in Budget 2025, this timeline was extended to 48 months.

Taxpayers can file an updated return for previous years, including FY 2021-22 and 2022-23. However, the last date to update the return for FY 2021-22 is March 31, 2025.

Under what circumstances can taxpayers file an updated return?

An updated return can be filed in most cases, except for certain exceptional circumstances. Even taxpayers who previously filed a loss return under Section 139(3) can submit an updated return. However, it cannot be a return claiming a loss.

When is an updated return not allowed?

There are several situations where an updated return cannot be filed, including:

1. If the revised income results in a lower tax liability.
2. If it leads to a tax refund or a higher refund.
3. If a tax survey has been conducted or a search has been initiated against the taxpayer.
4. If the tax department has seized or requisitioned documents.

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