Understand all about Form ITR-U

As per vide notification No.48/2022 dated 30 April 2022 the CBDT had notified a new Rule 12AC which provides a new tax return form i.e., Form ITR-U and the manner to file the same for furnishing an updated return under Income Tax Act, 1961. In this article, we are going to explain all about Form ITR-U.

So, without further ado. Let’s discuss. Happy reading!!

Let’s first understand the intent behind the “updated return”.

The Indian government had introduced a new section 139(8A) which relates to “updated return” in Income Tax Act as per vide Finance Act 2022, which permits all the taxpayers to file an updated return for the relevant assessment year. The intent of the government behind introducing the concept of updated return was to provide taxpayers an opportunity to rectify certain errors made in the last filled return and avoid litigation.

Now, let’s understand all about Form ITR-U.

Who is eligible to file Form ITR-U?

As per section 139(8A), any person who has furnished his original return of Income or furnished a belated return or revised return is eligible to furnish an updated return in the prescribed form i.e., Form ITR-U, in case of any omission or wrong facts, is given in his earlier return of Income filed under Income Tax Act. The said provisions related to updated returns are applicable from the assessment year 2020-2021 and onwards.

Please note - A person who has not furnished his income tax return for the relevant assessment year is also eligible to file an updated return i.e., Form ITR-U.

Are there any restrictions on filing Form ITR-U?

Yes, a person shall not be eligible to file an updated return as per vide Form ITR-U, for the relevant assessment year, in case:-

• An updated return has been already furnished for the relevant assessment year (i.e., an updated return can be filed only once for the relevant assessment year.)
• A search or survey has been initiated against him under Income Tax Act.
• His books of accounts or documents are requisitioned by Income Tax authorities.
• A notice for search or requisition under sections 132 and 132A of the Income Tax Act has been issued.
• Any assessment or reassessment proceedings or recomputation or revision is pending or has been completed for the relevant assessment year.
• If the tax authorities have any information about such person under the Smugglers and Foreign Exchange Manipulators Act, 1976 or the Prohibition of Benami Property Transactions Act, 1988 or the Prevention of Money-laundering Act, 2002 (15 of 2003), or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and the same has been communicated to such person prior to the due date of filing the updated return.
• Any information pertaining to such a person has been received under section 90 or section 90A of the Income Tax Act and the same is communicated to him before the due date of filing an updated return.
• Any prosecution proceedings have been initiated against such a person for the relevant assessment year.
• If such person or belongs to such class of persons, as may be notified by the Board in this regard:

When can an updated return be filled?

While filing the Form ITR-U, a taxpayer has to select a reason for submitting an updated return, which are:-

• Return previously not filed
• Income not reported correctly
• Wrong heads of income chosen
• Reduction of carried forward loss
• Reduction of unabsorbed depreciation
• Reduction of tax credit u/s 115JB/115JC
• Wrong rate of tax

Therefore, an updated return can be filled only when the above-mentioned reason persists.

Please note - As per the second proviso to section 139(8A),  an updated return cannot be filled if:-

• It is a return of loss
• It has the effect of reducing total income tax liability as determined in the last return filed for the relevant assessment year.
• It results in a refund or increases the refund amount due on the basis of the original return or belated return or revised return filed for the relevant assessment year.

What needs to be disclosed in the Form ITR-U?

While filing Form ITR-U, apart from the basic information such as name, PAN, Aadhar number, assessment year relevant to the tax year, and details of the last valid return filed, if any, a taxpayer needs to disclose the amount of additional income, under the prescribed income heads, on which additional tax is required to be paid at the rate of 25% or 50%, as the case may be. Also, as explained above, specific reasons for submitting an updated return need to be disclosed. Further, the challan details need to be given for the additional tax amount paid in respect of tax liability that arises on account of filing an updated return

What is the due date for filing Form ITR-U?

A person eligible to file an updated return can submit Form ITR-U within 24 months from the end of the relevant assessment year. Therefore, the due date to file Form ITR-U for the AY 2021-2022 is 31st March 2023.

We hope this article helps you understand the provisions related to updated return and Form ITR-U. In case you need any professional assistance while filing income tax returns or any other business compliances then feel free to reach out to our team of experts at Ontaxco. We are always happy to help you all :)