New Delhi: Missing a source of income while filing your ITR can happen, especially when fixed deposits are auto renewed and the interest goes unnoticed. In today’s Ask Wallet Wise query, we explain what options are available if you’ve already filed your return, discovered the omission later, and want to voluntarily correct it without waiting for a tax notice.
The Ask Wallet-Wise initiative offers expert advice on personal finance and money-related queries. You can email your queries to askwalletwise@nw18.com and we will try to get a top financial expert to address them.
I recently discovered that I had completely forgotten to include interest in my Income Tax Return (ITR) filed for financial year 2024-2025 (Assessment Year 2025-26) in respect of a fixed deposit which was auto renewed during that Financial Year. I came know about this omission last week when I encashed my fixed deposits.
I want to come clean and pay the applicable tax on the interest amount not taxed earlier. I tried to file a revised ITR but the income tax website does not allow me to revise the ITR for Assessment Year 2025-26. Is there any way out for me to voluntarily correct this omission and pay the tax now? I do not want to wait in fear of an income tax notice.
Expert’s Advice: Yes, you are right. Since the last date for filing the revised ITR for assessment year 2025-2026 was 31st December, 2025 it cannot be filed now.
For those taxpayers who fail to file their ITR or fail to revise their already file ITR to include income omitted, the income tax laws have provisions for filing an Updated ITR within four years from the end of the assessment year. So at any given point of time, you can file Updated ITR for four financial years. Since the window for filing the revised ITR for assessment year 2025-2026 was closed after 31st December, a new window to file an Updated ITR has opened from 1st April 2026 for assessment year 2025-2026.
As they say no lunch is free, the facility to file an Updated ITR comes with a cost. In addition to the tax and interest which you are otherwise required to pay, you have to pay additional tax of 25 percent of tax and interest. The quantum of additional tax goes up with each year of delay in filing the Updated ITR and reaching to 70 percent for those who file the updated ITR after three years but before four years from the end of the assessment year in respect of which the ITR is to be filed,
A suggestion to avoid such omissions in future. Please download the Annual Information Statement (AIS) before your file your ITR. If you had to referred to the AIS for the relevant financial year while filing the ITR for assessment year 2025-2026, you would have noticed the interest income of auto renewed fixed deposit reported by the bank and this would have saved you all this hassle.
