Latest news with #SandeepBhalla
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Business Standard
31-07-2025
- Business
- Business Standard
Tax dept starts online filing of updated returns: Know what's the process
The Income-Tax Department has enabled online filing of updated returns (ITR-U) for assessment years (AY) 2021–22 and 2022–23 through ITR-1 and ITR-2. The facility allows taxpayers to fix omissions or errors made in earlier filings, be it unreported income, incorrect tax rates, or missing returns altogether. Here's what you should know about filing updated tax returns. What is an Updated Return (ITR-U)? Introduced in Budget 2022, ITR-U allows individuals and companies to voluntarily declare additional income not previously reported, even if no original return was filed. However, it cannot be used to claim refunds or reduce tax liability; it is purely meant for paying up dues. 'ITR-U is a final chance for taxpayers to correct errors and declare undisclosed income before the tax department catches it. It comes with a cost, but avoids harsher penalties or prosecution,' said Ritika Nayyar, partner at Singhania & Co. What's new this time? The revised process is more rigorous and 'unlike before, taxpayers now need to submit the full applicable ITR form alongside ITR-U, with detailed financials, not just the additional income,' said Sandeep Bhalla, partner at Dhruva Advisors. The, Progressive penalty: 25 per cent extra tax if filed within 12 months 50 per cent for 12–24 months 60 per cent for 24–36 months 70 per cent for 36–48 months New disclosures: More details on income source, reason for revision, and verification One-time filing per AY: You can't revise your updated return later Who should file it? You may consider filing ITR-U if: -You missed filing your return earlier -You underreported income from salary, interest, rent, or capital gains -You used the wrong income head or tax rate -You want to avoid scrutiny due to AIS/TIS mismatches But not everyone qualifies. Bhalla notes that updated returns cannot be filed if: A search, survey or reassessment is underway Proceedings are active under laws like PMLA or Benami Act Key precautions to avoid trouble Ensure accuracy: Match details with AIS, TIS, and Form 26AS Document everything: Keep proof for at least 7 years Act before proceedings start: If notices are issued, you lose this window While the tax hit can be steep, up to 70 per cent of additional tax and interest, the updated return window gives taxpayers a valuable last chance to come clean. As Nayyar says, 'It's not a loophole, but a legal safety net, use it wisely, and only if needed.'
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Business Standard
10-07-2025
- Business
- Business Standard
Filed wrong ITR form? Consequences & how to fix it
With the ITR filing season in full swing, one mistake that many taxpayers make is selecting a wrong Income Tax Return (ITR) form. Experts warn this error can lead to delays, notices from the tax department, and even penalties in some cases. But there are remedies available, if you act in time. Why the right ITR form matters 'Filing an incorrect ITR form can render the return defective under Section 139(9) of the Income Tax Act,' says Sandeep Bhalla, partner at Dhruva Advisors. For example, using ITR-2 instead of ITR-3 for business income could result in income remaining unreported, triggering underreporting penalties. In some cases, the return may simply be treated as invalid unless corrected within the timeline. The Centralised Processing Centre (CPC) flags such returns and issues a notice. 'The taxpayer then gets 15 days to file a corrected return. Failing to do so means the original return is treated as not filed at all,' warns Vivek Jalan, partner at Tax Connect Advisory Services LLP. Financial and legal risks The fallout of filing the wrong form isn't limited to administrative inconvenience. 'It can delay refunds, disallow deductions like 80C or HRA, and even attract late filing fees of up to Rs 5,000,' explains Shefali Mundra, chartered accountant and tax expert at ClearTax. If the error leads to underreporting income, penalties under Section 270A may apply 50 per cent of underreported income or 200 per cent in cases of misreporting. 'Incorrect reporting also increases the chances of scrutiny, especially if details don't match AIS, TIS, or Form 26AS,' adds Niyati Shah, chartered accountant, Vertical Head – Personal Tax at 1 Finance. How to fix it? Taxpayers can file a revised return under Section 139(5) by December 31 of the relevant assessment year, as long as the original return was filed on time. 'If this window has lapsed, the Updated Return (ITR-U) under Section 139(8A) allows corrections within 48 months,' Bhalla points out. Tips to avoid mistakes Experts recommend understanding income sources thoroughly before selecting a form. 'A common mistake is assuming ITR-1 applies to all salaried individuals, even those with multiple properties or capital gains,' warns Shah. Taxpayers should verify pre-filled data and use tools that recommend the correct form or consult professionals when in doubt.
Business Standard
29-05-2025
- Business
- Business Standard
It's time to get Form 16 from your employer, and what to do if it's missing
Salaried Indians have started receiving Form 16, a document employers provide to help in filing Income Tax returns (ITR). Here's when you should get the document. According to the Central Board of Direct Taxes (CBDT) under Rule 31(3) of Income Tax Rules, 1962, salaried employees should receive Form 16 by June 15. Employers are required to furnish Form 16 within 15 days after filing the fourth quarter TDS return (Form 24Q), which is due on May 31. This means the last date to issue Form 16 is June 15, as per CBDT norms. What is Form 16? Form 16 is a certificate that organisations give to their salaried employees. It is a summary of the salary paid and tax deducted at source in a financial year. It has two parts: Can you file ITR without Form 16? Yes, it is possible to file your tax return even if you haven't received Form 16. Taxpayers can use salary slips, Form 26AS, the Annual Information Statement (AIS), and bank statements as alternatives. 'Taxpayers should use salary slips and compare them with Form 26AS and AIS data. If all three are consistent, one can proceed with ITR filing even without Form 16,' said Ritika Nayyar, partner, Singhania & Co. What if there's a mismatch? Sometimes, the figures in Form 16 may not match what's reflected in the income tax portal. This can delay return filing. 'If there is a mismatch between Form 16 and AIS, taxpayers should reconcile using payslips and seek correction from the employer, if required,' said Sandeep Bhalla, partner at Dhruva Advisors. For FY25 (assessment year 2025-26), the last date to file ITR has been extended to September 15. Filing after this date may attract penalties.
