Mistakes in your Income Tax Return (ITR) or missed income declarations can be rectified through the Updated Income Tax Return (ITR-U). Here's everything you need to know about ITR-U, including eligibility, filing process, and deadlines.
What Is ITR-U?
Introduced in the Union Budget 2022, ITR-U enables taxpayers to amend errors or omissions in their previously filed tax returns. Whether you forgot to file your original return or even a belated one, ITR-U provides a way to correct it. This form can be filed within two years from the end of the relevant Assessment Year.
When Can I Use ITR-U?
Starting from January 1st of the Assessment Year, taxpayers can use ITR-U to correct minor errors or omissions. However, ITR-U cannot be used to:
- Reduce your tax liability.
- Claim additional refunds.
- Enhance losses for future carry forward.
It is solely for errors that result in additional taxes being payable.
Situations Where ITR-U Is Not Allowed
ITR-U cannot be filed in the following cases:
- Filing a nil or loss return.
- Claiming or increasing a refund.
- Reducing previously declared tax liability.
- During assessment or reassessment proceedings.
- For cases involving search, seizure, or surveys by tax authorities.
Important Deadlines for ITR-U
Here are the filing deadlines for various financial years:
- FY 2020-21 (AY 2021-22): March 31, 2024
- FY 2021-22 (AY 2022-23): March 31, 2025
- FY 2022-23 (AY 2023-24): March 31, 2026
- FY 2023-24 (AY 2024-25): March 31, 2027
Plan ahead to avoid missing these critical dates.
Who Can File ITR-U?
ITR-U is designed for taxpayers in the following scenarios:
- Missed Returns: If you failed to file your original or belated return.
- Omitted Income: If you discovered income not reported earlier.
- Errors in Tax Head or Rate: If mistakes were made in choosing the income head or tax rate.
- Adjustments: To reduce carried forward losses, unabsorbed depreciation, or specific tax credits (Section 115JB/115JC).
Note: Only one updated return can be filed for each Assessment Year.
Additional Tax Implications
Filing ITR-U involves extra tax payments, depending on when it is filed:
- Within 12 months of the Assessment Year: 25% additional tax on due taxes, including interest.
- Between 12-24 months: 50% additional tax on the due amount.
This penalty aims to encourage timely compliance.
How to File ITR-U: Step-by-Step Process
Step 1: Download the Utility
- Visit the Income Tax e-filing portal and download the appropriate ITR Excel Utility for your Assessment Year.
Step 2: Prepare Updated ITR
- Open the Excel Utility, fill in the updated details, and validate the file. Use the pre-fill option for existing data to streamline the process.
- Generate the JSON file after completing the form.
Step 3: Calculate and Enter Tax Details
- Input the payment details (BSR code, deposit date, serial number, etc.). Validate and finalize the file.
Step 4: Upload the JSON File
- Log in to the e-filing portal and navigate to File Income Tax Return.
- Select Section 139(8A) as the filing type and upload the validated JSON file.
Step 5: Pay Additional Taxes
- Use Challan 280 to pay any additional tax liabilities, and include the payment details in the ITR-U.
Step 6: Complete and Verify
- After uploading, verify the return using Aadhaar OTP, EVC, or a Digital Signature Certificate (if applicable).
Once submitted, no further changes can be made. Download the acknowledgment for your records.
Conclusion:
Using ITR-U to update past returns is a proactive step that can save significant future complications, ensuring compliance and peace of mind. Addressing errors early can save you from future penalties and unnecessary complications. This provision empowers taxpayers to make things right on their terms—before any notice arrives.
Disclaimer: Aim of this article is to give basic knowledge about the topic to people who are not in touch with Indian tax norms. When anybody is dealing with these kinds of cases practically, he shall consider all relevant provisions of all applicable Laws like FEMA/Income Tax/RBI /Companies Act etc.
If you have any further questions or need assistance, feel free to reach out to us at admin@ushmaassociates.com or info@nricaservices.com, or contact us via call/WhatsApp at +91 9910075924.
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