A Brief Note on Belated and Revised Returns

The Income-Tax (IT) department has notified the final date to file belated and revised Income Tax Returns (ITRs) for the financial year (FY) 2022-23 or assessment year (AY) 2023-24, which is December 31, 2023.  Individuals who have failed to file ITRs can do so under Section 139(5) of the Income-Tax Act (ITA), 1961.

It is stated that taxpayers will have to shell out a late filing penalty of Rs 5,000 or Rs 1,000 in case their income is below Rs 5 lakh. A taxpayer should be well-versed with a few terminologies before filing the return.

Financial Year (FY) and Assessment Year (AY): The financial year is a 12-month period when an individual makes money. It’s akin to a yearly earning period. For instance, let’s say, an individual earns money from a job or business between April 1, 2022, and March 31, 2023, this period forms part of FY 2022-23.

Also,  the assessment year (AY) is the period after FY, which is the next 12 months, from April 1 to March 31, where the money an individual earns in the FY gets looked at for taxation purposes. For instance, in case an individual earned money between April 1, 2022, and March 31, 2023, the AY for that particular income would be 2023-24.

Simply put, FY is like the earnings calendar, and AY is when the government authorities check in on what an individual has earned to figure out taxes.

Belated and Revised Income Tax Returns (ITRs):  In the case an individual misses the deadline, they can still file the ITR, which is referred to as a belated return. This can be filed under Section 139(4) of the ITA, 1961.

It is important to note that there’s a penalty of Rs 5,000 under Section 234F of the ITA, 1961, for filing the return late.

The maximum penalty for annual income up to Rs 5 lakh is Rs 1,000. Also, the interest for late payment is at 1% per month after the due date until an individual files their return.

Similarly, in case an individual forgot to mention some income in their original return, they have the option to file a revised return under Section 139(5) of the ITA, 1961. 

For this, there’s no extra penalty for revising the return. However, any intentional error could lead to penalties in case the assessing officer discovers them.

Lastly, both belated and revised returns follow the same filing process as the original return. Although belated returns invite a fixed penalty, revised returns do not incur an additional penalty unless errors are intentional.