ITR U- What is ITR U FORM?

ITR-U or Updated Income Tax Return is the form that allows you to rectify errors or omissions and update your previous ITR. It can be filed four years from the end of the relevant assessment year. The government introduced the concept of the updated return in the Union Budget 2022.

Filing belated or revised ITR’s after 31st December of the A.Y is not possible. However, you can file an updated return using the ITR-U from January 1st of the A.Y, which can be used to correct minor errors or omission in your original ITR. With ITR-U, you cannot reduce the tax due, claim refunds or increase losses.

WHAT IS ITR-U?

ITR-U or Update Income Tax Return, is a form that allows taxpayers to update their ITR’s by correcting errors or omissions or allows a taxpayer to file ITR if they have not filed ITR within the due date and also missed to file the belated return, within four years from the end of relevant assessment year.

For Example- if you failed to file an ITR for A.Y 2023-24 and missed the revised/ belated return filing window, you can file an ITR-U after the end of the due date of filing belated/ revised return i.e. 1st Jan 2024 but within four years from the end of such A.Y i.e. 31st March 2028.

Section 139(8A) under the Income Tax Act allows you a chance to update your ITR withing four years. Four years will be calculated from the end of the year in which the original return was filed. ITR-U was introduced to optimize tax compliance by taxpayers without provoking any legal actions.

WHO CAN FILE ITR-U UNDER SECTION 139(8A)?

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.
• Income is not declared correctly.
• Chose wrong head of Income.
• Paid tax at wrong rate.
• To reduce the carried forward loss.
• To reduce the Unabsorbed Depreciation.
• To reduce the tax credit u/s 115Jb/ 115JC.

A taxpayer can file only one updated return for each Assessment Year (A.Y).

WHO IS NOT ELIGIBLE TO FILE ITR-U U/S 139(8A)?

ITR-U cannot be filed in the following cases: -

• Updated return is already filed.
• For filing nil return/ loss return.
• For claiming/ enhancing the refund amount.
• When updated return results in lower tax liability.
• Seach proceeding u/s 132 has been initiated against you.
• A survey is conducted u/s 133A.
• Books, documents, or assets are seized or called by the Income tax Authorities u/s 132A.
• If assessment/ reassessment/ revision/ re-computation is pending or completed.
• If there is no additional tax outgo (when the tax liability is adjusted with TDS credit/ losses and you do not have any additional tax liability, you cannot file an Updated Return).

Note: If the loss or any part thereof carried forward or unabsorbed depreciation carried forward or tax credit carried forward is to be reduced for any subsequent previous year as a result of furnishing an updated return of income for a previous year, an updated return is required to be furnished for each subsequent previous year.

WHAT IS THE TIME LIMIT TO FILE ITR-U?

The time limit for filing ITR-U is 48 months (i.e. 4 years) from the end of the relevant assessment year.

The due date for filing the updated return u/s 139(8A) for the previous four years have been shown in the table below: -

SHOULD YOU PAY ADDITIONAL TAX WHEN FILING ITR-U?

Yes, you should have to pay additional tax on the tax amount, depending upon when you file the ITR-U.

The additional tax is to be paid is as follows:

FREQUENTLY ASKED QUESTIONS

Q. Can Nil return be filed in ITR-U?

A. NO, you cannot file a nil return in ITR-U. ITR U cannot be filed when there is no additional cash outflow.

Q. What are the benefits of filing form ITR-U?

A. By filing out ITR-U, one can avoid the Scrutiny assessment u/s 143(3), best judgement assessment u/s 144, and income escaping assessment u/s 147. One can also avoid the hassle of a survey, search and seizure proceedings.

Q. Can a refund be claimed in ITR-U?

A. NO, ITR-U cannot be filed in the following cases: claiming a refund, increase in the refund amount, nil return or filing a loss return. Therefore, you cannot claim a refund in ITR-U.

Q. Can I File ITR-U if my total income is below Rs. 5 Lakhs and I have claimed rebate u/s 87A?

A. Yes, you can file but you will be liable for late filing fees. The same must be paid, and the payment details must be updated under the “ Taxes paid under 140B” tab.