31st December 2023: File the Return or Revise the Return


31st December 2023: File the Return or Revise the Return

Though March is important from a business and taxation perspective, December is not less important now. Those who have failed to file the Income Tax Return (ITR) for the FY 2022-23 within the due date can file it belatedly by 31st December 2023. Similarly, if the return is already filed earlier but there is any omission or error then also 31s December is the last date to revise it, that too without any additional cost & consequences. Lot of taxpayers are still under the wrong notion that they are not required to file ITR if the tax is fully paid or even if the final tax liability of the taxpayer is less than the amount of Tax Deduction at Source (TDS). This is not so. All such taxpayers should file the ITR by 31st December.  Companies & firms have to file the return of income even if there was no business during the year. Let us know about the importance of the 31st December:

Belated Income Tax Return [Section 139(4)]

Normally, the taxpayers are expected to file ITR within the due date which is normally either 31st July or 31st October. However, those taxpayers who failed to file it within the due date are allowed little extra time with certain late fees and lesser benefits. This extra time period is now ending on 31st December. Earlier, taxpayers were allowed to file ITR till 31st March. However, considering the advancement of the technology and electronic mode of information availability, the time period has been reduced by 3 months to December. Belated or late filings of ITR have costs & consequences not only in terms of monetary penalty & fine but also by way of denial of various benefits & incentives as under:

1.  Under Section 234F of the Income-tax Act, late fee of Rs 5,000 is applicable. However, small taxpayers with a taxable income not exceeding Rs 5 lakh have to pay only Rs 1,000 as late fee. This late filing fee must be deposited before the filing of belated ITR. Interest is also payable if any income tax dues are payable @ 1% per month if self-assessment and advance tax are due while filing.

2.  If taxpayers have incurred a loss during any year, they are allowed to carry forward such loss for set off against subsequent year income. However, this benefit of loss carry forward is available only if ITR is filed within the due date. If the ITR is filed after the due date then the benefit to carry forward the loss is lost except in respect of loss from house property.

3.  Belated Return results in denial of the benefit of deduction u/s 80HH to sections 80RRB, u/s 80IA, IB, IC, etc. Similarly, the benefit of application of income to the charitable trust is available only if the ITR, audit report in Form No. 10BB/10B, other declarations regarding accumulation etc. are furnished within a prescribed time period. Delay in filing results in the denial of the benefit.

Revised Return [Section 139(5):

Not only the belated return, 31st December is also the last opportunity to revise it  so as to correct any error or omission. Following are some of the instances which are normally require taxpayers to file the revised ITR:

1.   To Offer income for taxation which was not incorporated earlier;

2.  To claim the credit for TDS which was not done earlier or was not reflected in Form No. 26AS at the time of filing original ITR;

3.   To offer the income from Capital gain transaction which could not be incorporated in the original ITR;

4.   To offer the interest on FDR/Saving Bank account etc which was not earlier offered in ITR;

5.   To carry forward the TDS related to income taxable in subsequent years; etc.

The time for revising the ITR has also been reduced to 31st December from 31st March.  Unlike belated returns, the revised return doesn’t attract any late fee.  As far as revised return is concerned, one may note that;

1.   Return can be revised any number of times without any restrictions or bar.

2.   Revised Return can be filed even if the return is processed & Intimation is issued U/s 143(1)(a).

3.   Even if the income tax refund is received, revised return can be filed.

4.   It can be filed even if it is resulting in lower income as compared to the original ITR.

What after 31st December?

1.   The Finance Act of 2022 has introduced the concept of “Updated Returns” to allow a longer duration to file the return of income, albeit with higher cost.  However, updated return can be filed only if it is beneficial to the income tax department. The route of updated return cannot be used by the taxpayers to claim benefits or concessions. Updated return cannot be filed if (a) it is a return of a loss or (b) has the effect of decreasing the total tax liability determined on the basis of return furnished earlier or (c) if it results in refund or (d) increases the refund due on the basis of return furnished earlier.

2.   An updated return can be filed within 24 months from the end of the relevant assessment year subject to various terms & conditions. It can be filed even after the expiry of time limits specified for the filing of a belated return or revised return of income.

3.   A penalty or fee is not levied upon a person who wishes to furnish an updated return. However, they will be required to pay an additional tax in accordance with Section 140B of the Income Tax Act. The taxpayer will be liable to pay 25% of additional tax on the tax dues if ITR-U for FY 2021-22 (AY 2022-23) is filed within 12 months of relevant assessment year & 50% if it is filed after that.

4.   An updated return can be furnished only once. If a person has already filed an updated return, it cannot file the updated return again for the same assessment year at subsequent occasions.

5.   There are certain categories of taxpayers who are barred from filing the Updated Return. Taxpayers in whose case income tax raid has been carried out or where income tax survey (Other than TDS survey) has been conducted or in case any proceeding for assessment or reassessment or re-computation or revision is pending, etc are not allowed to file the updated return.


Taxpayers may revisit the ITR already filed earlier for the FY 2022-23 & may use the option of revising income tax return if there is some omission or error. Those taxpayers who have not filed the return so far must ensure to file the belated return before 2023 ends.

[Readers may forward their feedback & queries at taxtalknew@gmail.com. Other articles & response to queries are available at www.theTAXtalk.com]