Belated Return vs Updated Return: Which One Should You File?
- Dipali Waghmode
- Nov 3
- 9 min read
The Income Tax Department allows taxpayers to file their returns even after missing the due date through a belated return or to correct past mistakes through an updated return. Understanding the difference is crucial because the type of return you file affects your tax liability, penalties, and refund eligibility. Both options serve different purposes—while a belated return is about delayed compliance, an updated return is about rectification and transparency. Choosing the right one ensures timely compliance and helps avoid unnecessary penalties or scrutiny.
Table of Contents
What is a Belated Return under the Income Tax Act?
A belated return is filed when a taxpayer fails to file the Income Tax Return (ITR) within the original due date specified under Section 139(1) of the Income Tax Act. For most individuals, this due date is July 31 of the assessment year, while those whose accounts require an audit have until September 30. If the taxpayer misses this deadline, the law allows them to file a belated return under Section 139(4) before December 31 of the same assessment year.
However, filing a belated return attracts late filing fees and interest under Sections 234F, 234A, and 234B. In most cases, the penalty ranges between ₹1,000 and ₹10,000 depending on the total income. Additionally, taxpayers lose certain benefits such as the ability to carry forward losses (except for losses under ‘Income from House Property’). A belated return must be filed using the same ITR form applicable to the taxpayer, but it cannot be revised once the deadline passes.
What is an Updated Return under Section 139(8A)?
An updated return, introduced by the Finance Act 2022, provides an extended opportunity for taxpayers to correct errors or omissions in their previous filings or even file a return if they completely missed doing so earlier. It can be filed within 24 months from the end of the relevant assessment year under Section 139(8A).
For instance, if the assessment year is 2024–25, the updated return can be filed until March 31, 2027. However, filing an updated return requires the taxpayer to pay additional tax of 25% or 50% of the tax and interest payable, depending on when it is filed within the 24-month period. The provision ensures voluntary compliance by allowing taxpayers to declare previously unreported income and avoid litigation or notices.
This option, however, cannot be used to declare losses, claim additional refunds, or reduce tax liability. It is meant purely to disclose higher income or correct underreported details.
Key Differences Between Belated and Updated Return
Particulars | Belated Return | Updated Return |
Governing Section | Section 139(4) | Section 139(8A) |
Filing Window | Till December 31 of the assessment year | Up to 24 months from end of assessment year |
Purpose | Filed when the original due date is missed | Filed to correct errors or omissions after due dates |
Penalty | ₹1,000–₹10,000 plus interest | Additional tax of 25%–50% of tax and interest |
Corrections Allowed | No | Yes |
Can Reduce Tax Liability? | No | No |
Refunds Allowed | Yes | Yes |
Carry Forward of Losses | Restricted | Allowed with accurate income disclosure |
Who Can File | Any taxpayer missing due date | Any taxpayer wanting to update earlier filings |
Revised Filing Allowed | Yes (before deadline) | No revised filing after submission |
This comparison highlights that while belated returns address missed deadlines, updated returns provide a corrective mechanism for disclosure or error rectification.
Penalties and Additional Tax Implications
Filing a belated return attracts a penalty of ₹1,000 if the total income is below ₹5 lakh, and ₹10,000 otherwise, as per Section 234F. Additionally, interest under Sections 234A, 234B, and 234C applies for delayed payment of tax.
Updated returns, however, carry a significantly higher financial implication. If filed within 12 months from the end of the assessment year, an additional tax of 25% on the tax and interest amount is payable. If filed after 12 months but before 24 months, this rises to 50%. These provisions ensure timely disclosure and discourage misuse of extended deadlines.
Both return types are valid forms of compliance, but the cost of delay increases substantially once the belated return window closes.
Filing Deadlines and Compliance Timelines
Original ITR Deadline: July 31 of the assessment year (September 30 for audits).
Belated Return Deadline: December 31 of the same assessment year.
Updated Return Deadline: Within 24 months from the end of the assessment year.
For example, if the original due date for AY 2024–25 was July 31, 2024, a belated return could be filed until December 31, 2024, while an updated return could be filed until March 31, 2027.
The longer time frame of the updated return offers flexibility but at the cost of additional taxes. Therefore, timely filing remains the most cost-effective option.
Eligibility Criteria for Filing an Updated Return
Not every taxpayer is eligible to file an updated return. The following conditions apply:
The updated return cannot be filed if it leads to a refund or decreases the total tax liability.
It can only be filed if additional income is being disclosed.
It cannot be filed if proceedings for assessment, reassessment, or prosecution are already initiated.
Cases involving searches, surveys, or seizure operations are ineligible.
The taxpayer must pay the due tax, interest, and additional tax before submission.
This ensures that the provision is used for genuine rectification and voluntary compliance rather than for strategic deferral or misuse.
When to File a Belated Return
A belated return is suitable when a taxpayer:
Misses the original filing deadline due to oversight or delay.
Has already computed income and tax accurately but couldn’t submit on time.
Needs to comply before receiving potential non-filing notices.
Wants to claim a refund before the assessment year ends.
This type of filing helps regularize late compliance with minimal penalties, making it ideal for taxpayers who simply missed the due date but have no income discrepancies.
When to File an Updated Return
An updated return is recommended when a taxpayer:
Discovers additional income after filing the original or belated return.
Identifies errors or omissions in reported figures.
Wishes to correct underreporting to avoid scrutiny or penalties later.
Missed filing a return altogether but wants to regularize compliance after the belated deadline.
It allows comprehensive correction and safeguards against future tax notices, provided the taxpayer accepts the higher tax cost upfront.
How to Decide Between Belated and Updated Return
The decision depends on timing and intent. If the delay is minor and within the same assessment year, a belated return is the practical choice as it carries lower penalties. However, if the taxpayer identifies underreported income or errors after the belated deadline, filing an updated return under Section 139(8A) is the correct approach.
Updated returns are costlier but help maintain a clean tax record and demonstrate voluntary compliance, which may reduce future scrutiny from the tax department.
Importance of Choosing the Correct Type of Return
Filing the correct return ensures accuracy, minimizes penalties, and protects eligibility for deductions, refunds, and loss carry-forward benefits. An incorrect choice could result in higher taxes, disallowed claims, or future notices.
Understanding the difference between these two return types helps taxpayers plan better and comply within the prescribed timelines. Inaccurate or delayed reporting often leads to interest accumulation and extended verification by the authorities.
How TaxBuddy Simplifies the Filing Process
TaxBuddy provides an AI-driven tax filing platform designed to simplify complex return procedures. The system automatically identifies whether a taxpayer should file a belated or updated return based on income details, filing dates, and legal provisions.
Its expert-assisted plans ensure accurate calculations, proper inclusion of deductions, and timely compliance under the Income Tax Act. By combining automation with professional expertise, TaxBuddy helps avoid penalties, ensures accurate disclosure, and offers post-filing support for notices or corrections.
Conclusion
The choice between a belated and an updated return depends on whether the issue is a missed deadline or an error in previously filed details. Filing a belated return is appropriate for minor delays, while an updated return is best for rectifying mistakes or omissions after the deadline. Timely compliance saves both time and money, ensuring smoother tax processing.
For anyone looking for assistance in tax filing, it is advisable to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy provides flexibility to taxpayers by offering both self-filing and expert-assisted options. The self-filing plan is designed for individuals who are familiar with the tax filing process and prefer to handle it themselves using an intuitive, step-by-step interface. The expert-assisted plan, on the other hand, is ideal for those who want professional support to ensure complete accuracy, compliance, and maximized deductions. Users can easily switch between these options based on their comfort level and the complexity of their income sources, ensuring a personalized and stress-free filing experience.
Q2. Which is the best site to file ITR?
The best site to file an Income Tax Return (ITR) depends on ease of use, accuracy, and reliability. While the official Income Tax e-filing portal is the government’s primary platform, third-party services like TaxBuddy stand out for their AI-driven accuracy, expert validation, and guided assistance. TaxBuddy combines automation with human expertise, offering real-time error detection, instant tax computation, and dedicated support. This ensures every return is compliant with the latest rules and eliminates the risk of common filing errors or missed deductions.
Q3. Where to file an income tax return?
Income tax returns can be filed directly through the official government portal at www.incometax.gov.in, which is available to all registered users. Alternatively, many taxpayers prefer trusted online platforms like TaxBuddy that simplify the process by providing a user-friendly interface and expert review. Filing through TaxBuddy ensures automatic data validation, secure document upload, and compliance with the Income Tax Act, reducing the chances of rejection or notice from the department.
Q4. Can I file both belated and updated returns for the same year?
No, a taxpayer cannot file both a belated and an updated return for the same assessment year. Each serves a distinct purpose—belated returns are meant for taxpayers who missed the original due date but still want to comply before December 31 of the assessment year, while updated returns are for those who wish to correct or disclose additional income after the belated return window has closed. Once an updated return under Section 139(8A) is filed, it replaces all earlier filings for that year.
Q5. What happens if I miss the updated return filing window?
If a taxpayer fails to file an updated return within the 24-month window allowed under Section 139(8A), they lose the opportunity to voluntarily correct errors or omissions. In such cases, any unreported income may attract scrutiny, penalties, or prosecution if later discovered by the Income Tax Department. Missing this window can also prevent taxpayers from regularizing their compliance record, making it crucial to act promptly once discrepancies are identified.
Q6. Are refunds allowed in belated and updated returns?
Yes, both belated and updated returns allow taxpayers to claim refunds, provided the excess tax paid is accurately reflected in the return. However, for belated returns, delays may cause late processing of refunds. In the case of updated returns, refunds are allowed only when the tax liability has been correctly calculated and verified by the department. It’s important to note that an updated return cannot be filed solely to claim or increase a refund amount.
Q7. Is there a penalty for filing a belated return?
Yes, belated returns attract a late filing fee under Section 234F. If the total income is below ₹5 lakh, the penalty is ₹1,000. For income exceeding ₹5 lakh, the penalty increases to ₹10,000. Additionally, interest under Sections 234A, 234B, and 234C applies if tax payments were delayed. While filing a belated return ensures compliance, timely filing before the due date remains the best way to avoid penalties and interest.
Q8. What is the additional tax for filing an updated return?
When filing an updated return, taxpayers must pay an additional tax on top of their existing liability. If the updated return is filed within 12 months from the end of the assessment year, an additional 25% of the total tax and interest payable is charged. If it’s filed between 12 to 24 months, the rate increases to 50%. This provision ensures fairness and encourages early voluntary compliance by penalizing prolonged delays in income disclosure.
Q9. Can I file an updated return if I didn’t file any return earlier?
Yes, Section 139(8A) allows taxpayers to file an updated return even if no original or belated return was filed. This enables individuals who completely missed their filing obligations to regularize their tax records by paying the due tax, interest, and additional tax. It helps avoid scrutiny, prosecution, and potential notices from the Income Tax Department. However, the taxpayer must ensure that the updated return reflects complete and correct information for the relevant financial year.
Q10. What are the benefits of filing an updated return?
Filing an updated return offers multiple benefits. It allows taxpayers to disclose omitted income, rectify underreported figures, and correct inadvertent errors in previously filed returns. Doing so helps maintain compliance and avoid penalties, scrutiny, or prosecution in future assessments. Moreover, it enhances transparency, demonstrating voluntary correction and good faith to the Income Tax Department. This mechanism ultimately promotes ease of compliance while protecting taxpayers from legal consequences.
Q11. Can losses be carried forward in a belated return?
Not all losses can be carried forward in a belated return. Losses under the head “Income from House Property” can still be carried forward, but losses from business, capital gains, or speculative transactions are disallowed if the return is filed after the due date. This restriction underscores the importance of timely filing to preserve future tax benefits. Updated returns, however, allow correction of previously unreported losses if they were originally eligible for carry forward.
Q12. How does TaxBuddy help in choosing between belated and updated returns?
TaxBuddy’s AI-driven system automatically evaluates a taxpayer’s filing history, income details, and compliance timelines to recommend whether a belated or updated return is applicable. It calculates penalties, additional tax, and interest in real time to ensure full transparency before submission. Expert-assisted plans further provide one-on-one support from qualified tax professionals who verify all computations and ensure the correct ITR form is used. This helps taxpayers make informed decisions, minimize errors, and stay compliant effortlessly.
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