Updated Return U/s 139(8)

Updated Return - Form ITR-U

Contents

• What is an Updated ITR?
• Who is Eligible to File Form ITR-U?
• Should you pay additional tax when filing ITR-U?
• What is the Time Limit to File the ITR-U?
• What details are required to File Form ITR-U?
• Who is ineligible to File Form ITR-U?
• How is an Updated Return verified?

What is an Updated ITR?

Section 139(8A)of the Income Tax Act allows taxpayers who later realize that they failed to record any income a chance to update their return or file a fresh return in case no return was filed earlier, up to two years from the end of the relevant assessment year. The assessee needs to disclose only the amount of additional income, under the prescribed income heads, on which additional tax is required to be paid. New ITR Form “ITR-U” has been introduced for filing such updated return of income.

Who is Eligible to File Form ITR-U?

Any person who has made an error or omitted certain income details in any of the following returns can file an updated return:

• Original return of income, or
• Belated return, or
• Revised return

An Updated Return can be filed if :

• Return previously not filed
• Income not reported correctly
• Wrong heads of income chosen
• Reduction of carried forward loss
• Reduction of unabsorbed depreciation
• Reduction of tax credit u/s 115JB/115JC
• Wrong rate of tax

Should you pay additional tax when filing ITR-U?

Yes, you will have to pay an additional tax of 25% or 50% on the tax amount, depending on when you file the ITR-U.

What is the Time Limit to File the ITR-U?

The time limit provided for filing an updated return is 24 months from the end of the relevant assessment year. Hence, in the current financial year 2022-23, updated returns for AY 2020-21 and AY 2021-22 can be furnished.

What details are required to File Form ITR-U?

ITR-U seeks the following additional details from the taxpayers:

Part A - General Information (ITR-U)

This part of ITR-U seeks general information from taxpayers related to the filing of an updated return. It includes the following:

• Are you eligible to file an updated return? i.e., a person is not falling in such circumstances wherein an updated return can’t be filed.
• Selecting the ITR form for filing an updated return
• Reasons for updating income. This includes reasons such as returns previously not filed, income not reported correctly, wrong heads of income chosen, etc.
• Are you filing an updated return within 12 months from the end of the relevant AY or between 12 to 24 months from the end of the relevant AY?
• Are you filing an updated return to reduce carried forward loss, unabsorbed dep., or tax credit?

Part B: ATI Computation Of Total Updated Income And Tax Payable (ITR-U)

• Enter the additional income figures in each head of Income. A detailed break-up of each head is not required.
• Enter the income declared as per the last return
• Enter the Total Income amount. You can find this from ‘Part B-TI’ of the ITR form (1-7) filled by you.
• The amount payable, if any (You can take it from the – ‘Amount payable’ section of Part B-TT of the ITR form)
• Amount refundable, if any (You can take it from the – ‘Refund’ section of Part B-TT of the ITR form)
• Enter the tax payable amount as per the last return.
  • However, if a refund was claimed in the last return, then enter the claim amount ii) If you have received the refund, enter the amount of refund received, including the interest amount on such refund.
• If the last return was filed late, enter the fee paid for late filing.
• Enter the regular assessment tax paid in the last return
• Aggregate liability on the additional income
• Additional tax liability on updated income [25% or 50% of (9-7)]
• Net tax amount payable (9+10)
• Tax already paid u/s 140B:  If updated ITR results in a tax payable amount, the same must be paid as a Self-Assessment Tax. Make the payment and enter the challan details.

Who is ineligible to File Form ITR-U?

An Updated Return cannot be filed if :

• If updated return is return of loss
• If updated return is reducing Income Tax Liability in return filed earlier
• If the updated return results in an increase of Refund
• If a search has been initiated under section 132
• If books of Accounts or any other documents are requisitioned under section 132A.
• If a survey has been conducted under section 133A
• If any proceeding of assessment, reassessment, re-computation, or revision is pending or completed for that relevant year
• If Assessing Officer has information against such person under the Prevention of Money Laundering Act or Black Money (Undisclosed Foreign Income and Asset) and Imposition of Tax Act or Benami Property Transactions Act or Smugglers and Foreign Exchange Manipulators Act and the same has been communicated to the assessee.
• If the information for the relevant assessment year has been received under an agreement referred to in section 90 or section 90A in respect of the such person and the same has been communicated to him, prior to the date of furnishing of return under this subsection.
• Other Notified Persons

How is an Updated Return verified?

ITR-U can be verified through :

• Electronic Verification Code (EVC), is given for non-tax audit cases.
• Digital Signature Certificate (DSC) in tax audit cases.

Frequently Asked Questions

Q-What are the benefits of filing an Updated Return i.e. Form ITR-U?

• Taxpayers get an additional 24 months to file Income Tax Return even after the due date of filing Original ITR, Belated ITR, and Revised ITR have lapsed or passed.
• Taxpayers can report any missed out income and pay tax on it thus reducing the chances of future tax notices and litigations.
• Tax Liability and penalty under Updated Return is less than in case of proceedings for undisclosed income or income escaping assessment.

Q- Can you claim a refund by filing the updated return?

• No, if the Updated Return results in a decrease in tax liability, increase in a tax refund, or claiming of loss, the taxpayer cannot file an Updated Return.

Q- What is the due date to file an Updated Return for AY 2021-22?

• Due Date to file an Updated Return is 24 months from the end of the relevant Assessment Year. Thus, the due date to file an Updated Return in Form ITR-U for AY 2021-22 is 31st March 2024 (2 years from the end of 31st March 2022)

Q- What is the due date to file an Updated Return for AY 2020-21?

• Due Date to file an Updated Return is 24 months from the end of the relevant Assessment Year. Thus, the due date to file an Updated Return in Form ITR-U for AY 2020-21 is 31st March 2023 (2 years from the end of 31st March 2021).

Q- Is it possible to file two ITR U for the same financial year?

• A taxpayer can file an Updated ITR only once for a Financial Year. Hence, it should be done carefully.