But if the department was correct in pointing out the mismatch, and you are not able to explain the mismatch, the taxpayer should file an updated return. It can be done within two years from the end of the relevant Assessment Year. So, for the financial Year 2021-22, it is the last year to file updated returns. Updating your Return of Income under Section 139(8A) of the I.T. Act, 1961, if eligible, should be done by paying tax on the missed income and additional tax to avoid further proceedings in the form of assessment/reassessment, which could lead to tax demand and penalty. Currently, there is no penalty as such. However, you must pay an additional tax of 25 per cent in the first year and 50 per cent in the second year while updating your return.