ITR-U is the Form used for updating your income tax return. The government introduced the concept of updated returns in the Union Budget 2022.
What is ITR-U?
Have you ever forgotten to report an income or made a mistake in your ITR?
Section 139(8A) under the Income Tax Act allows you a chance to update your ITR within two years. Two years will be calculated from the end of the year in which the original return was filed. ITR-U was introduced to optimise tax compliance by taxpayers without provoking legal action. Read on to learn more about ITR-U.
Who can file 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 in the following cases:
- Did not file the return. Missed return filing deadline and the belated return deadline
- Income is not declared correctly
- Chose wrong head of income
- Paid tax at the wrong rate
- To reduce the carried forward loss
- To reduce the unabsorbed depreciation
- To reduce the tax credit u/s 115JB/115JC
A taxpayer could file only one updated return for each assessment year(AY).
Who is not eligible to file ITR-U?
ITR-U cannot be filed in the following cases:
- Updated return is already filed
- For filing nil return/ loss return
- For claiming/enhancing the refund amount.
- When updated return results in lower tax liability
- Search proceeding u/s 132 has been initiated against you
- A survey is conducted u/s 133A
- Books, documents or assets are seized or called for by the Income Tax authorities u/s 132A.
- If assessment/reassessment/revision/re-computation is pending or completed.
- If there is no additional tax outgo (when the tax liability is adjusted with TDS credit/ losses and you do not have any additional tax liability, you cannot file an Updated ITR)
What is the time limit to file ITR-U?
The time limit for filing ITR-U is 24 months from the end of the relevant assessment year.
ITR-U is applicable from 1st April 2022. So during the current financial year 2022-23, you can file ITR-U for AY 2020-21 and AY 2021-22.
E.g., The Return of FY19-20 can be updated till 31st March 2023.
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.
|ITR-U filed within||Additional Tax|
|12 months from the end of relevant AY||25% of additional tax + interest|
|24 months from the end of relevant AY||50% of additional tax + interest|