ITR U – What is ITR-U Form and Its Provisions

Budget 2022 has introduced the new section 139(8A) in Income Tax Act, 1961. Refer budget update @ Introduction of new Income Tax ‘Updated’ Return Type. Section 139(8A) enables the filing of “Updated Return” (aka ITR-U) by the taxpayers. Section 139(8A) has come into effect from 01st Apr 2022

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.

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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).

Persons not eligible to file Updated Return u/s 139(8A)

All persons (Individual, HUF, Firms/LLP, Companies, AOP, BOI etc) are eligible to file Updated returns u/s 139(8A). But the updated return cannot be filed in below cases.

1. If it is Return of Loss.
2. If it has the effect of decreasing the tax liability or increasing the refund.
3. A search has been initiated u/s 132 or books of accounts or other documents or any assets are requisitioned u/s 132(A).
4. A Survey has been conducted u/s 133A other than Section 133A(2A).
5. If any Assessment is pending or completed.
6. If Assessing Officer has information about the assessee under specified acts .
7. If any information has been received u/s 90 or 90A and same has been communicated to him before the date of furnishing updated return.
8. If any Prosecution proceedings have been initiated before the date of furnishing updated return.
9. If the taxpayer belongs to such class of persons as notified by board.

Penalty / Additional Tax Payable

Updated return can be filed only with the penalty. The penalty for filing Updated return is as follows

1. Filed within 12 months from the end of relevant assessment year: Penalty is 25% of aggregate of tax and interest payable on filing of updated return
2. Filed after 12 months from the end of relevant assessment year: Penalty is 50% of aggregate of tax and interest payable on filing on updated return

Your total income tax liability would be as under:
Total Income Tax Liability = Tax Payable + Interest +Late-filing fees + Additional Tax
Net Tax Liability = Total Income Tax Liability (as above) – TDS/TCS/Advance Tax/Tax Relief

Note:

• Section 140B provides for payment and computation of tax, interest, fee and additional income tax on updated return
• Updated return can be filed even if the original or belated returns is not filed.
• Updated return can be filed only once and it is not possible to revise updated return.
• If you are filing the updated return for first time (not filed earlier), then you are required to pay penalty u/s 234F. If you have filed return earlier, then penalty u/s 234F will not be levied.
• ITR filed u/s 139(8A) will be considered as defective if the return does not include tax payment details.