If the correct income is not disclosed in the income tax return, then 50 percent tax will have to be given on the undisclosed income.

Budget 2022: Finance Minister Nirmala Sitharaman, while presenting the budget for 2022-23, has announced the facility to update income tax return (ITR) filing for two years. But on updating ITR, taxpayers will also have to pay tax.

Under the facility that is being provided to update income tax return, 25 percent tax will have to be paid on undisclosed income if ITR is updated within one year of filing income tax return. But if the taxpayer updates the return in the second year of filing ITR, then he will have to pay 50 percent tax on the undisclosed income.

During this, the Income Tax Department caught that the taxpayer has not shown his correct income and if a notice is sent by the Income Tax Department to the taxpayers, then the taxpayer will not be able to update his income tax return. The benefit of income tax return update facility will be available to those people who could not declare the correct income and have not paid tax on it.

Taxpayers will benefit from this announcement of the Finance Minister as there is a penalty of 100 percent on the settlement of undeclared income by the Income Tax Department, while the matter will be settled by paying 50 percent tax under the updated filing. In fact, many taxpayers are earning a small amount of tax from the stock market to cryptocurrencies and many other places, which they do not show the earnings while filing the income tax return. But taxpayers will benefit from the facility of updating income tax returns.

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