The concept of ITR-U was introduced in the Union Budget 2022. Section 139(8A) of the Income Tax Act along with Rule 12C of Income Tax Rules is brought to help the taxpayers in tackling the mistakes made in the Income Tax Return which came into knowledge after the expiry of period for filing/revision of Income Tax Return.
The aforesaid Form ITR-U is applicable wef 1st April, 2022 to give an option to optimize the tax compliances avoiding the consecutive legal actions.
An updated return in ITR-U can be filed by all the taxpayers irrespective of the fact that whether they had filed their original/revised/belated return.
ITR-U can be filed to rectify any mistake in the return if filed or to declare the tax liability if the return was not filed.
Further there are some cases where the updated return can not be filed as mentioned below;
i. If the return is nil.
ii. If the return is of loss.
iii. If the updated return will increase the amount of refund as declared in the original return.
iv. If the updated return will decrease the tax liability as declared in the original return.
v. If cases is under section 132A.
Vi. If the survey has been conducted for the said assessment year under section 133A.
vii. If search/prosecution proceedings has already been initiated for the relevant assessment year.
viii. If the assessment/reassessment/revision/re-computation is either pending or completed for the relevant assessment year.
ix. If the assessing officer has information against the assessee under the prevention of money laundering act or black money and imposition of tax act or benami property transactions act or smugglers and foreign exchange manipulators act and the same has been communicated to the assessee.
x. Other notified persons.
Time limit for filing updated return
Updated return can be filed up to 2 years from the end of the relevant assessment year. Hence for the FY 2021-22 the updated return can be filed up to 31st March, 2025.
This is to be noted here that the updated return can be filed only after the expiry of the specified time u/s 139(1) for original return u/s 139(4) for belated return and u/s 139(5) for the revised return.
Payment of additional tax
An additional tax of 25% or 50% of the tax liability is required to be paid before filing an updated return in ITR-U in accordance with the below time limit;
i. If updated return is filed within 12 months from the end of the relevant assessment year – 25% additional tax + interest (eg. for FY 2021-22 if filed till 31/03/2024)
ii. If updated return is filed within 24 months from the end of the relevant assessment year – 50% additional tax + interest (eg. for FY 2021-22 if filed after 31/03/2024 till 31/03/2025)
Note :
For any particular assessment year an updated return in ITR Form-U can be filed only once.