Finance Buddy

The last date to file revised or belated income tax return (ITR) for financial year 2021-22 was 31 December 2022. If you have missed this deadline, then the option is to file an updated tax return (ITR U). This option was introduced in Budget 2022 and is available for up to 24 months from the end of the relevant assessment year. ITR U can only be filed if a taxpayer has additional income to declare, irrespective of whether they have filed original ITR or not. “If someone wants to claim TDS refund by filing ITR U, that can’t be done as it cannot be used to file a nil tax return. A loss return too can’t be filed as reporting losses to be set off can reduce tax outgo. One can only pay additional taxes in an updated return," said Sujit Bangar, founder, TaxBuddy . This is what differentiates a revised and an updated return. “A revised return lets you correct errors in the original ITR, which may reduce your net taxable income and final tax liability. But an updated return is filed onl...

The new tax regime (Section 115AC of the Income-tax Act, 1961) provides benefits of a lower tax rate, while offering fewer deductions and exemptions. Nevertheless, if one has a salary structure that provides adequate benefit in the new tax regime, then here’s how one should go about switching to it. So How Does An Individual Taxpayer Switch His Tax Regime? To start with, the employee has to inform his/her employer at the beginning of the  financial year  on his/her decision to choose between the old and the new tax regime. The employee can choose to switch between these two regimes every year. That said, salaried taxpayers, who also have a business or professional income, have to follow an additional process. According to Archit Gupta, founder and CEO, Clear, a tax filing assistance company, such salaried taxpayers who also have a business income have to file form 10-IE. It is a declaration made by the taxpayers for choosing the new tax regime, as well as for opting...