Form ITR-U: Eligibility, Time Limit, and Scenarios | Tax360 Chennai

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FORM ITR-U AND UPDATED RETURNS

Form ITR-U is a specific form provided by the Income Tax Department of India for filing an updated return. The "U" in ITR-U stands for "Updated." It is used when individuals or entities need to make revisions or corrections to their previously filed income tax return. The Finance Act of 2022 created this new concept, allowing taxpayers to update their ITRs within two years of the end of the relevant assessment year, subject to tax payment.

The Income Tax Act, Section 139(8A), allows you to update your ITR after two years. The two-year period will begin with the conclusion of the fiscal year in which the original return was submitted. ITR-U was implemented to improve taxpayer compliance while avoiding legal action.

GIST OF CBDT NOTIFICATION

The Gist of CBDT (Central Board of Direct Taxes) Notification refers to a summary or concise overview of the key points or provisions contained in a notification issued by the CBDT.

CBDT issued Rule 12AC for submitting Updated Return of Income in Form ITR-U (ITR for updated return) as per the requirements of Section 139(8A) of the Income-tax Act, 1961 (Act) in Notification No. 48/2022 dated 29.04.2022 in G.S.R. 325(E) through Income-tax (Eleventh Amendment) Rules, 2022.

FURNISHING AN UPDATED RETURN OF INCOME: ELIGIBILITY AND ITS MANNERS

S.No	Person	Manner of furnishing return of Income
1.	Individual, or Hindu undivided family, or a firm or limited liability partnership, or an association of persons or a body of individuals, whether incorporated or not, or a local authority or an artificial juridical person whose accounts are required to be audited under section 44AB of the Act, or a Company or a political party required to file Form ITR-7.	Electronically under digital signature.
2.	Individual, or Hindu undivided family, or firm, or limited liability partnership, or an association of persons or a body of individuals, whether incorporated or not, or a local authority or an artificial juridical person, or a person required to file a return under sub-section (4A), sub-section (4B), sub-section (4C), or sub-section (4D) of section 139, other than a person mentioned above.	(A) Electronically under digital signature; or (B) Transmitting the data electronically in the return under electronic verification code.

An updated return can be filed even if the taxpayer has not filed any income tax returns under section 139 for the relevant assessment year.If a person has already filed an income tax return, he may only file another return to disclose additional income.

ELIGIBILITY TO FILE AN ITR-U

Anyone who has made an error or omitted certain income facts in any of the following returns is eligible to file a revised return:

Original income tax return, or
Belated tax return, or
Revised tax return

INFORMATION TO BE PROVIDED WHILE FILING ITR-U

Section 139(8A) and Rule 12AC require individuals to file Form ITR-U within twenty-four months of the end of the relevant assessment year in order to update their income.
Taxpayers filing ITR-U will be required to provide the following reasons for changing their income:

Previously unfiled return

Incorrectly stated income

Wrong income headings selected

Reduction of carried over loss

Unabsorbed depreciation is reduced

Reduction of tax credits under sections 115JB/115JC

Incorrect tax rate

TIME LIMIT TO FILE ITR-U

INELIGIBILITY TO FILE FORM ITR-U

The updated return has already been filed.
For submitting a nil return/loss return.
To claim/increase the refund amount.
When an updated return results in a lesser tax bill.
A search process under Section 132 has been initiated against you.
A survey is being carried out in accordance with Section 133A.
The Income Tax authorities confiscate or demand books, records, or assets under section 132A.
If an assessment/reassessment/revision/re-computation is in progress or has been finished.
You cannot file an Updated ITR if there is no additional tax outgo (where the tax liability is adjusted with TDS credits/losses and you have no new tax liability).

Payment of Additional Tax

Original due dates for filing TDS Return for F.Y.2022-23:

Updated ITR is filled within 12 months from the end of relevant assessment year	25% of tax due and interest
Updated ITR is filled after 12 months but before 24 months from the end of relevant assessment year	50% of tax due and interest

If a taxpayer files an updated return but fails to pay the additional taxes, the return becomes invalid.

UPDATED RETURN FILING SCENARIOS

Missed Filing or Late Filing: If the original return was not filed within the due date or the extended deadline.
Inaccurate Income Disclosure: If income was not appropriately disclosed in the initial filing.
Incorrect Source of Income: If an incorrect source of income was chosen while filing the return.
Incorrect Tax Rate: If tax was paid at an incorrect rate.
Loss Carried Forward: To reduce the loss carried forward from previous years.
Unabsorbed Depreciation: To lower the unabsorbed depreciation from previous years.
Tax Credit Adjustment: To reduce the tax credit u/sec. 115JB/115JC