If a taxpayer has missed filing income tax returns (ITRs) for previous financial years, certain remedies may still be available under the income tax act depending on the nature of the case and time elapsed since the original deadline.
The available course of action generally depends on factors such as whether the taxpayer is claiming a refund, needs to correct errors is previously filed return, declare income that was missed earlier, or failed to file an altogether. There are two provisions available: Updated returns or condonation of delay requests but both serve different purposes.
What is the difference between updates returns and condonation of delay?
Condonation of delay filing and updated return (ITR-U) are two different remedies under the income tax law
According to two experts who spoke to Mint, condonation of delay is a relief mechanism where the taxpayer requests the department to permit filing of a delayed return, especially where refund claims or carry forward of losses are involved. In this case, approval from the income tax department is required before such delayed claim is admitted.
An updated return, on the other hand, allows a taxpayer to voluntarily correct omissions or report additional income and involves paying the additional tax. However, it cannot be used to claim a refund or reduce .
What to do if you missed filing ITRs for several years?
A taxpayer who could not file ITRs within the prescribed due dates due to genuine hardship, such as prolonged illness, hospitalization, mental health issues, family emergency, death in family, natural calamity or other such issues, may seek relief through a condonation of delay application, according to Suraj Singh, Founder of SD Singh & Associates, Chartered Accountants.
A condonation application for claiming refund or carry forward of losses can generally be filed within six years from the end of the relevant assessment year, said Gaurav Makhijani, Managing Partner at MGA. He added that the application is examined on a case-to-case basis and is subject to satisfaction of the prescribed authority regarding genuineness of hardship and correctness of the claim.
This provision applies to every assessee or taxpayers, meaning salaried resident taxpayers, senior citizens, non-resident Indians () and even freelancers can apply for condonation of delay if applicable, both experts confirmed.
What documents must be submitted to claim relief under condonation of delay?
According to Singh, the taxpayer should submit documentary evidence proving the reason for delay, and the correctness of the refund/loss claim. The following documents are required:
- Medical records or hospitalisation paper and doctor’s certificates
- Death certificate of family member (if applicable)
- Evidence of accident/natural calamity
- Passport/travel documents (for NRIs)
- Proof of refund due
- Affidavit/explanatory letter
After the taxpayer submits the required documents, the authority examines whether the hardship is genuine and whether the claim is bona fide, and then accepts or rejects the request.
Makhijani also said filing the return becomes particularly important in cases involving refund claims or carry forward of losses. He added that where additional taxes are payable and there has been a delay, taxpayers should make the payment at the earliest to avoid further interest liability.
Should you file ITR in the upcoming season if you missed the last few years?
Under the Indian tax law, all years are different. Thus, non-filing of ITRs for earlier years does not restrict a taxpayer from filing the current year ITR, provided the due date or belated return timeline is still available for the current assessment year, Makhijani said.
“A pending condonation application for prior years and the compliance obligation for the current year operate independently. In fact, continuing timely compliance for subsequent years may support the taxpayer’s bona fide conduct before the tax authorities,” he added.