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What is Income Tax Updated Return (ITR-U)?

The Income Tax Department announced a new Form ITR-U for filing of Updated Income Tax Returns in Budget 2022. It allows taxpayers to amend their ITRs within two years from the end of the relevant assessment year. The new Form ITR-U will be available to taxpayers for filing updated income tax returns for 2019-20 and 2020-21 fiscals.   The new provision is expected to help taxpayers who often commit errors or make some omissions while filing ITR. 

Who can file ITR-U?

Any person eligible to update returns for FY 2019-20 and subsequent assessment years as per the relevant provisions of the IT Act can file the updated return via Form ITR-U. Any taxpayer can file an updated return whether he has submitted his original/revised/delayed return of income or not.

What are the cases in Which ITR-U Can be Filed?

  • Return Previously not filed.
  • Income not reported correctly
  • Wrong Heads of Income Choosen
  • Reduction of Carried forward losses
  • Reduction of unabsorbed Depreciation
  • Reduction of Tax Credit u/s 115JB/115JC
  • Wrong rate of tax

What are the cases in which ITR-U Form Can Not be filed?

  • NIL Return
  • Loss Return
  • Increase in Refund/Claiming of Refund
  • Search/Survey/Prosecution Proceedings are Initiated for said A.Y.
  • Assessment/Reassessment/Revision/Recomputation is Pending or Completed for Said A.Y.

What is the prescribed Date to file Form ITR-U?

Form ITR-U can be filed within two years of the end of the relevant assessment year. The provisions of section 139(8A) related to the filing of an updated return of income have come into effect from 01.04.2022. Hence, in the financial year 2022-23, updated returns for AY 2020-21 and AY 2021-22 can be furnished.

An updated return of income can be furnished only once for the relevant assessment year. Hence, taxpayers should be very careful in filing Form ITR-U. There is no provision to revise the updated return.

What is the Additional Tax Liability under Form ITR-U?

To avail the benefit the assessee is required to pay additional tax computed as under:

  • 25% of tax, HEC, SC, and interest as calculated above, if an updated return is to be filed within 12 months from the end of the assessment year.
  • 50% of tax, HEC, SC, and interest as calculated above if an updated return is to be filed after 12 but before 24 months.

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Note: This Post was last updated on August 21, 2022

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