Form ITR-U

Form ITR-U: Updated Return U/s 139(8A) Income Tax Act, 1961

The Finance Act 2022, has inserted subsection (8A) in section 139 to enable the filing of an updated return, that allows you to rectifying errors or omissions and update your previous ITR. It can be filed within two years from the end of the relevant assessment year. The section provides that an updated return can be filed by any person irrespective of the fact whether such person has already filed the original, belated or revised return for the relevant assessment year or not.

What is an Updated ITR (ITR U)

ITR-U is a form that allows taxpayers to correct errors or omissions on their ITRs up to two years from the end of the relevant assessment year to update their return. The ITR-U form is a rescue for those who have not filed their ITR or made inaccurate and false entries while filing their income tax returns. Section 139(8A) under the Income Tax Act allows you a chance to update your ITR within two years i.e. 24 months from the end of the relevant assessment year.

Prescribed Date to file Form ITR-U

An updated return can be filed at any time within 24 months from the end of the relevant assessment year. For instance, for AY 2023-24, you missed the revised/ belated return filing window, you can file an ITR-U after the end of the assessment year, i.e. 31 March 2024 but within two years from there, i.e. 31 March 2026.?

For Example :

Assessment YearLast Date of Updated ITR FilingAY (2021-22)31 March 2024AY(2022-23)31 March 2025AY(2023-24)31 March 2026

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 is eligible to 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 : In the case of Previously Return Not Filed, taxpayers can file an Updated Return to report their income and fulfill their tax obligations.
• Income is not declared correctly : In these situations where income was not declared correctly, taxpayers can file an Updated Return to rectify the error and provide accurate income details.
• Choose wrong head of income : When wrong heads of income are chosen, taxpayers can use ITR-U to correct the classification and allocate income under the appropriate heads.
• Paid tax at the wrong rate : When an incorrect rate of tax has been applied, taxpayers can use ITR-U to correct the rate and ensure accurate calculation of their tax liability.
• To reduce the carried forward loss : In situations involving the reduction of carried forward loss, taxpayers can file an Updated Return to adjust and reduce the carried forward loss accordingly.
• To reduce the unabsorbed depreciation : When there is a need for the reduction of unabsorbed depreciation, taxpayers can file an Updated Return to adjust and reduce the unabsorbed depreciation.
• To reduce the tax credit u/s 115JB/115JC : In situations involving the reduction of tax credit under Sections 115JB/115JC, taxpayers can file an Updated Return to reduce the tax credit accordingly.

A taxpayer can file only one updated return for each assessment year (AY).

Situations when an updated return of income cannot be furnished

An updated return cannot be filed in the following three situations:

Situation 1

An updated return cannot be filed -

a) If an updated return is a return of loss: An updated return cannot be filed if it reflects total income as a loss. However, there is no prohibition on filing an updated return if there is a loss under any head of income but the total income is positive.?

For example, Mr. Amit filed his return of income for the Assessment Year 2022-23 declaring a total income of Rs. 20 lakhs. Subsequently, he noticed that he had failed to disclose in his return of income a short-term capital gain of Rs. 4 lakhs arising from the transfer of listed equity shares under section 111A. In the same year, he also suffered a long-term capital loss of Rs. 20 lakhs from the transfer of immovable property. In this case, Mr. Amit would be required to carry forward the long-term capital loss from the transfer of immovable property because it cannot be adjusted from the other incomes that Mr. Amit has. But due to this fact, he won't be restricted from filing an updated return because ultimately his total income (after including short-term capital gain from the transfer of listed equity shares) would be positive, i.e., Rs. 24 lakh.?

b) results in lower tax liability determined on the basis of original, revised or belated return filed by assessee or

c) results in or increasing the refund due on the basis of original, revised or belated return filed by assessee.

Situation 2

A person cannot file updated return wherein

a) If a search is initiated against the assessee: An updated return cannot be filed for the assessment year relevant to the previous year in which a search is initiated under section 132 and for any assessment year preceding such assessment year.?

For example, if a search was initiated on 01-06-2023, the updated return cannot be filed for the assessment year 2024-25 and any year preceding such assessment year.?

b) A survey has been conducted under section 133A, other than section 133A(2A), in the case such person or

c) A notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person or

d) A notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person. In this situation, an updated return cannot be filed for the assessment year relevant to the previous year in which such search is initiated or survey is conducted or requisition is made and any assessment year preceding such assessment year.

Situation 3

An updated return cannot be filed for the relevant assessment year wherein

a) An updated return has been furnished by him

b) Any proceeding for assessment or reassessment or recomputation or revision of income is pending or has been completed.?

c) The Assessing Officer has information in respect of such person under:

• The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976
• The Prohibition of Benami Property Transactions Act, 1988
• The Prevention of Money-laundering Act, 2002 or
• The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. and the same has been communicated to him, prior to the date of furnishing of updated return.

d) Information has been received under an agreement referred to in section 90 or section 90A in respect of such person and the same has been communicated to him, prior to the date of furnishing of return of updated return.

e) Any prosecution proceedings have been initiated in respect of such person, prior to the date of furnishing of updated return.

f) Assessee is such person or belongs to such class of persons, as may be notified by the Board.

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