ITR U: Updated Income Tax Return

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Sakshi Shah

ITR-U
Updated Return
Last updated on February 2nd, 2023

Under Budget 2022, Finance Minister announced that taxpayers now have the option to correct their income tax return by filing an Updated Income Tax Return (ITR-U). Thus, if there are any omissions or errors in the ITR filed earlier or if the taxpayer has missed out on filing or revising the ITR up to the due date, then they can still file an Updated ITR. The finance minister introduced Section 139(8A) of the Income Tax Act in the Finance Bill 2022.

Further, CBDT issued a notification on 29th April 2022 to notify the form for filing Form ITR-U i.e. Updated Income Tax Return under Section 139(8A) of the Income Tax Act. Therefore from AY 2020-21 onwards, the taxpayer can file an updated return of Income in Form ITR-U along with the applicable ITR Form from ITR-1 to ITR-7.

What is Section 139(8A) of the Income Tax Act? – Updated Return

As per Section 139(8A) of the Income Tax Act, a taxpayer who has filed an Original ITR under Section 139(1), Revised ITR under Section 139(5), Belated ITR under Section 139(4), or not filed ITR at all can file ITR U i.e. Updated ITR under Section 139(8A) upto 24 months from the end of the relevant assessment year.

The taxpayer cannot file an Updated ITR in the following cases:

Thus, the taxpayer can file an Updated Return to report an income that they had not reported in the ITR filed earlier and is ready to pay additional tax on it. Further, the taxpayer can file an Updated ITR only once. This return cannot be revised.

Form ITR-U Updated Return

What is the Due Date for filing an Updated Return i.e. ITR-U?

A taxpayer can file an Updated ITR under Section 139(8A) of the Income Tax Act within 24 months from the end of the relevant assessment year. The CBDT in its notification specifies that the taxpayers can file an Updated ITR from AY 2020-21.

It is important to note that the taxpayer can file Updated ITR u/s 139(8A) only once the time limit for filing Belated ITR u/s 139(4) or Revised ITR u/s 139(5) has lapsed.

Example: For AY 2022-23 the due date to file a belated return has already lapsed (i.e. 31st December 2022). So, from 1st January 2023 onwards ITR U can be filed for this AY, and the last date to file the same is 31st March 2025.

Due date to file Belated/ Revised Return31/12/2022
Due date to file Updated Return31/03/2025
Due date to file Belated/ Revised Return31/03/2022
Due date to file Updated Return31/03/2024
Due date to file Belated/ Revised Return31/03/2021
Due date to file Updated Return31/03/2023

Penalty on Filing ITR U – Pay Additional Tax under Section 140B of the Income Tax Act

The taxpayer filing an Updated Return must also submit proof of payment of tax and penalty as per Section 140B of the Income Tax Act. ITR U can not be filled without payment of additional taxes.

Case 1: Not filed ITR earlier

If the taxpayer has not filed Original ITR under Section 139(1), Revised ITR under Section 139(5), or Belated ITR under Section 139(4), then they must pay the following:

However, such taxpayers can claim credit for Advance Tax, TDS, TCS, and Relief under Sections 89, 90, 90A, 91 115JAA, or 115JD.

Case 2: Has filed ITR earlier

If the taxpayer has filed Original ITR under Section 139(1), Revised ITR under Section 139(5), or Belated ITR under Section 139(4), then they must pay the following tax:

However, such taxpayers can claim credit for any taxes paid earlier.

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Summary – Tax Liability and Additional Tax u/s 140B

When is the Updated Return filed? If ITR has been filed earlier If ITR has not been filed earlier
In the first year after the end of the relevant AY
(ITR-U filed after the expiry of the time limit for revised or belated ITR but before completion of 12 months from the end of relevant AY)
Tax Payable on Additional Income

ADD: Interest on Tax Payable

ADD: Additional Tax at 25% of Tax Payable + Interest
Tax Payable on Total income after reducing tax credits

Add: Interest on Tax Payable

Add: Late Fee u/s 234F

ADD: Additional Tax at 25% of Tax Payable + Interest
In the second year after the end of the relevant AY
(ITR-U filed after the expiry of 12 months from the end of the relevant assessment year but before the completion of 24 months from the end of the relevant AY)
Tax Payable on Additional Income

ADD: Interest on Additional Income

ADD: Additional Tax at 50% of Tax Payable + Interest
Tax Payable on Total income after reducing tax credits

Add: Interest on Total Income

Add: Late Fee u/s 234F

ADD: Additional Tax at 50% of Tax Payable + Interest

Computation of Tax Payable with Updated Return

  Particulars Amount
  Total Tax on Income XXXX
Less: Advance Tax (XXXX)
Less: TDS (Tax Deducted at Source) (XXXX)
Less: TCS (Tax Collected at Source) (XXXX)
Less: Self Assessment Tax (XXXX)
Less: Relief u/s 89/90/90A/91 (XXXX)
Less: Tax Credit u/s 115JAA/115JD (XXXX)
  Basic Tax Payable XXXX
Add: Interest u/s 234A, 234B, 234C XXXX
  Tax Payable XXXX
Add: Additional Tax (25% or 50%) on Tax Payable XXXX
  Total Tax Payable XXXX

Note: Late Fee under Section 234F must be paid if ITR under Section 139(1) is not filed earlier. An additional tax rate is not applied to fees under section 234F.

Difference between Updated ITR u/s 139(8A) and Revised ITR u/s 139(5)?

FAQs

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

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

Who can file an Updated Return (ITR-U)?

As per Section 139(8A), any taxpayer can file an Updated Return to report any additional income and pay relevant tax on it. The taxpayer can file an Updated Return even if they have not filed an Original, Revised, or Belated ITR. Taxpayers must file an Updated Return in Form ITR-U within 24 months from the end of the relevant Assessment Year.

Can a refund be claimed in ITR U?

No, If the Updated Return results in claiming a refund or an increase in the refund amount then you are not eligible to file ITR U.

Can ITR U be filled even if I do not have any tax payable?

No, If your total tax liability is being adjusted with TDS credit and you do not have any additional tax payable then you can’t file ITR U.

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