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Budget 2022: Now you can file a 2nd updated income tax return in case of a mistake

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In a big relief to taxpayers, Finance Minister Nirmala Sitharaman on Tuesday said the government is now making a provision for taxpayers to file an updated income tax return in case they have made a mistake.

This one-time window will help taxpayers to correct any mistakes they have made in filing their income tax returns and they can then submit the additional tax, the finance minister explained in her budget speech. 

The updated returns will have to be filed within two years of the first return, she said. 

The finance minister said the government was taking these steps to simplify the tax system and enhance compliance. Besides, the provision is expected to lead to a decrease in litigation.

The finance minister also said that the government was introducing a new provision by which any undisclosed income detected during the search and seizure operations of the Income Tax Department could not be offset aginst losses. In such cases a flat tax would have to be paid on the entire amount that is detected. The step is being taken to check tax evasion.