Any taxpayer who missed the original due date or who has already filed an income tax return (ITR) but later identified any error or omission should file a belated or revised return by December 31. Filing by this deadline is crucial because it is the last statutory opportunity to voluntarily comply with the law, correct mistakes, report omitted income, or claim eligible deductions.
Filing the ITR by December 31 of the relevant assessment year (AY) is critical, as no belated or revised return is allowed after this deadline. Beyond this date, taxpayers can only file an updated return under Section 139(8A) of the Act within 48 months from the end of the relevant AY.
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Why the December 31 Cut-off Matters
“If no return is filed by December 31 of the relevant assessment year, the taxpayer loses the option to file an original or belated return for that financial year,” says Sandeep Sehgal, partner, Tax, AKM Global, a tax and consulting firm.
Updated return
For updated return, payment of additional tax ranging from 25%, 50%, 60% or 70% of the aggregate tax and interest payable, along with the applicable late filing fee of up to Rs 5,000 is mandatory.
From Penalties to “Best Judgment”
The tax authorities are also empowered to ensure compliance. “Where a taxpayer ignores the filing requirement, the department may issue a show-cause notice under Section 142(1), calling upon the taxpayer to file the return and furnish relevant details,” says Neeraj Agarwala, partner, Nangia & Company.
If the taxpayer still fails to comply, the tax officer may proceed to complete a best judgment assessment, determine the taxable income on the basis of available information, and raise a tax demand accordingly. Any unpaid tax will continue to attract interest and penalties.