If you have made a mistake or have missed reporting an income while filing your Income Tax Return, one more chance is available to update it within two years from the end of the relevant assessment year, under Section 139 (8A) under the Income Tax Act in ITR-U form.
For instance, for the financial year 2020-2021, an updated return can be filed by March 31, 2024 if the taxpayers have not filed ITR or missed reporting some income.
In the Union Budget 2022, the government mentioned the ITR-U for the first time, which can be filed under the following conditions:
1) Income not reported correctly
2) Wrong rate of tax
3) Return previously not filled
4) Reduction of carried forward loss
5) Reduction of unabsorbed depreciation
6) Wrong heads of income chosen
7) Reduction of tax credit of MAT/AMT u/s 115JB/JC
Period for filing
The updated return( ITR-U) can be filed within 24 months from the end of the relevant assessment year.
It may be noted that the deadline to file an updated return (ITR-U) for FY 2019-20 is March 31, 2023.
Related Penalty
It shouldn’t come as a surprise that a late ITR filing is always associated with penalties. One would need to pay an additional 25 percent of the tax and interest due on the income missed to be reported if the return is filed within one year from the end of the relevant assessment year.
The penalty gets enhanced to 50 percent if the return is filed after one year and within two years of the relevant assessment year.
Read More: Income Tax: How Can You Claim Deduction On Savings Account Interest? Know Section 80TTA Of IT Act
What is the procedure for filing ITR-U?
You have to visit the official website of the tax department and download the ITR-U form. In the first part of the form, provide the general information like: a) PAN, b) Aaadhar Number, c) Assessment Year and d) Reason for filing the updated return.
In the second part, provide details of the head of Income, under which additional income is being returned as per the updated return. In the third part of the form, provide details on tax payments as per the updated return.
In addition, there are multiple tax filing websites wherein you can have guidance from experts who can make you understand each detail of ITR-U, and help you with the filing.
However, there are some cases in which individuals will not be able to file updated returns. There are as follows:
1) For filing nil return/loss return
2) To claim/increase the refund
3) If an updated return is minimising income tax liability from the return filed earlier
4) An I-T survey has been conducted under Section 133 A
5) An I-T search has been conducted under Section 132
6) The person falls under the Prevention of Money Laundering Act or Black Money (Undisclosed Foreign Income and Asset) and Imposition of Tax Act or Benami Property Transactions Act or Smugglers and Foreign Exchange Manipulators Act
7)Once you are done filing an updated return for a financial year, a revised updated return for the same year cannot be filed again.
If assessment/reassessment/revision/re-computation is pending or completed
8) If your taxable income is below INR 2,50,000 (i.e., below the basic exemption limit)
9)If your additional tax liability is NIL
