Understanding ITR-U: A Guide to the ITR-U Form and Filing Procedures

Individuals can use the ITR-U form, or Updated Income Tax Return, to correct mistakes or missing information on their previously filed tax returns. This form must be submitted within two years of the relevant assessment year ending. The government introduced the concept of updated returns in the 2022 Union Budget.

Newest information:

The Updated Income Tax Return (ITR-U) allows you to fix errors or missing information in your income tax return for up to two years after the assessment year ends. This gives you a safety net if you, for example, filed your return for the 2023-24 assessment year (AY) and missed the deadline for a revised or belated return. In this case, you could still file an ITR-U until March 31, 2026.

Filing for ITR-U for AY 2023-24 opened on January 1, 2024.

This option is authorized by Section 139(8A) of the Income Tax Act, which gives you two years from the original return filing to make corrections. By offering this opportunity to fix mistakes without penalty, ITR-U encourages better tax compliance among taxpayers.

Who is eligible to submit ITR-U in accordance with Section 139(8A)?

If you made a mistake or missed reporting income on a previous return, you can file an amended return to correct it. This applies to:

• Original return: The first return you filed for the assessment year.
• Belated return: A return filed after the due date but before the belated return deadline.
• Revised return: A return filed before the processing of your original return, typically to make minor corrections.

When to File an Amended Return:

• You didn't file your return on time, and the belated return deadline has passed.
• You incorrectly reported your income.
• You chose the wrong category for your income.
• You paid tax at the wrong rate.
• You want to claim carried forward losses, unabsorbed depreciation, or tax credits under sections 115JB/115JC.

Important Note: You can only file one amended return per assessment year.

Please remember: This information is for general guidance only. It's always recommended to consult with a tax professional for specific advice on your situation.

Who does not qualify to submit ITR-U under section 139(8A)?

You cannot file an ITR-U (Updated Income Tax Return) in the following situations:

• Previous revisions: You have already submitted a revised return for the same assessment year.
• Loss or Nil Returns: The ITR-U is not intended for filing returns with no income (nil returns) or those showing losses.
• Refund changes: You cannot use the ITR-U to claim a tax refund or increase the existing refund amount.
• Lowering tax liability: If filing the updated return reduces your tax liability compared to the original one, you cannot use the ITR-U.
• Investigation initiated: The tax department has initiated a search proceeding against you under section 132.
• Surveys conducted: A survey has been conducted under section 133A of the Income Tax Act.
• Seizure of records/assets: The Income Tax authorities have seized or summoned your books, documents, or assets under section 132A.
• Pending proceedings: Any assessment, reassessment, revision, or re-computation proceedings are pending or completed for the relevant year.
• No additional tax due: You do not have any additional tax to pay because your tax liability is already settled by TDS credits and losses.

What is the deadline for filing ITR-U?

The deadline for submitting ITR-U is 24 months after the conclusion of the corresponding assessment year. Updates to the FY 2022-2023 (AY 2023-2024) return can be made until March 31, 2026.

For Example:

Steps to Complete Form ITR-U

According to Income Tax regulations, when filing an updated return (ITR-U), it's necessary to submit an updated version of the applicable ITR form (ITR 1 – 7). The form consists of two parts: Part A and Part B. Below are the guidelines for completing each section:

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Part A: General Information

1.????? Provide your PAN (Permanent Account Number).

2.????? Enter your name.

3.????? Mention your Aadhaar Card Number.

4.????? Specify the Assessment Year.

5.????? Indicate whether you've filed a return previously for the assessment year. If yes, refer to the ITR acknowledgement ("Filed u/s") to determine if it was filed under section 139(1) or other sections.

6.????? Provide details such as form number, acknowledgement number, or receipt number, along with the filing date of the original return (DD/MM/YYYY). These details can be found in the ITR acknowledgement.

7.????? Check the eligibility conditions mentioned and select the appropriate option.

8.????? Choose the ITR form number.

9.????? Select at least one reason for updating the ITR-U (multiple selections are allowed).

10.? If it has been 12 months or more since the end of the year in which you filed the return, select the '12-24 months option'. Otherwise, select the 'up to 12 months option'.

11.? If the updated return affects the balance of carried forward loss or unabsorbed depreciation, mention the assessment year in which they were affected due to the updated return. Also, indicate if a revised or updated return was filed earlier.

Part B: ATI Computation of Total Updated Income and Tax Payable?

1.????? Enter additional income figures in each head of Income. Detailed break-up of each head is not required.

2.????? Enter the income declared as per the last return.

3.????? Enter the Total Income amount from 'Part B-TI' of the ITR form (1-7) previously filled.

4.????? The amount payable, if any (from the 'Amount payable' section of Part B-TT of the ITR form).

5.????? The amount refundable, if any (from the 'Refund' section of Part B-TT of the ITR form).

6.????? Enter the tax payable amount as per the last return.

7.????? If a refund was claimed in the last return, enter the claim amount. If a refund was received, enter the amount received, including interest.

8.????? If the last return was filed late, enter the fee paid for late filing.

9.????? Enter the regular assessment tax paid in the last return.

10.? Aggregate liability on the additional income.

11.? Additional tax liability on updated income [25% or 50% of (9-7)].

12.? Net tax amount payable (9+10).

13.?? If the updated ITR results in a tax payable amount, it must be paid as Self-Assessment Tax. Make the payment and enter the challan details.

How to verify ITR-U?

The verification method for your ITR-U depends on whether your case has undergone a tax audit:

• Non-tax audit cases: Generate Electronic Verification Code (EVC).
• Tax audit cases: Utilize a Digital Signature Certificate (DSC).

Om Prakash | ComplianceEase.IN | Income Tax India Official

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