Extending the Time Limit to file the Updated Return in Budget 2025

Sub-section (8A) of section 139 of the Act relates to the furnishing of updated return. As per the present provisions, an updated return can be filed up to 24 months from the end of the relevant assessment year.

The facility of updated return has promoted voluntary compliance against payment of additional income tax of 25% of aggregate of tax and interest payable for updated return filed up to 12 months from the end of the relevant assessment year.

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For updated returns filed after the expiry of 12 months and up to 24 months from the end of the relevant assessment year, the additional income tax of 50% of aggregate tax and interest is to be paid.

Amendments Effect From The 1st day of April 2025

With a view to further nudging voluntary compliance, it is proposed to amend the said sub-section so as to extend the time limit to file the updated return from the existing 24 months to 48 months from the end of the relevant assessment year.

The rate of additional income tax payable for updated returns filed after the expiry of 24 months and up to 36 months from the end of the relevant assessment year shall be 60% of the aggregate of tax and interest payable

The additional income tax payable for updated returns filed after the expiry of 36 months and up to 48 months from the end of the relevant assessment year shall be 70% of the aggregate of tax and interest payable.