Last date to file ITR-U for FY 2019-20 is 31 March 2023
The government has introduced the concept of updated return in Income Tax Act in Union Budget 2022. Section 135(8A) of the Income Tax Act provides provision of updated return. According to this provision the taxpayer are now allowed to update their ITR within two years of filling, in case of errors and omissions. The notification has been released by the government amend the Income Tax rule. The new rules of Income Tax specify the form in which the return needs to be updated and the manner of verification.
In the form ITR-U, the assessee needs to disclose only the amount of extra income, under the prescribed income heads, on which additional tax is required to be paid. No detailed income break-up needs to be reveals, like in the case of filing regular ITR forms. The assessee must also specify the particular reason for filing the updated return in ITR-U. Further, it is required to mention the challan details for the additional tax paid for the updated return.
What is the Period for filling ITR – U?
The Income Tax provisions related to ITR-U are applicable from 1st April 2022. The due date of filing ITR-U is 24 months from the end of the relevant assessment year.
For example; for the current assessment year 2022-23, you can file ITR-U for AY 2020-21 and AY 2021-22.
Thus, the due date to file updated Return in form ITR-U for AY 2020-21 is 31st March 2023
Who are eligible for Filing Form ITR-U?
Person eligible to update returns for subsequent assessment years as per newly inserted section 139(8A) 0f the Act, are;
- Any person, who has furnished his original return of income, or
- Furnished belated return, or
- Furnished revised return
Can now furnish an updated return in case of any omission or wrong statement in his earlier return of income by such person:
- In case a person has not furnished his return of income even then such person can do so
- A assessee would be able to file only one updated return for each assessment year.
Who are not eligible for Filing ITR-U??
If search or survey or prosecution proceedings are initiated against assessee for the relevant assessment year, they cannot file the updated return.
The assessee cannot file updated return even if assessment/reassessment/revision/re-computing is pending or completed for the relevant assessment year.
What is the Penalty applicability for ITR-U filing?
There are certain penalties for ITR-U. If filed within 12 months from the assessment date, there is a 25% penalty. As much as 50% penalty applies if ITR is filed within 24 months. Hence, taxpayers looking to update their returns for FY 2019-20 will need to pay the tax and interest along with an additional 50 % of such tax and interest. For those looking to file an updated return for FY 2020-21, the additional amount of the payable and interest will be 25%.
When can updated Return can be filled?
- Previously, return not filed
- Income reported wrongly
- Correct heads of income not chosen
- Decrease in carried forward loss
- Reduction of unabsorbed depreciation
- Reduction of tax credit under section 115JB/115JC
- Incorrect rate of tax
When can updated Return cannot be filled?
- If updated return of loss
- if updated return has decline income tax liability in return filed earlier
- If updated return results in the increase of Refund
- If search has been started under section 123A.
- If survey has been conducted under section 133A.
How to Compute the tax payable for updated return?
As per section 140Bof Income Tax Act 1961, Income Tax liability for updated return will be calculated as follows:
|Tax payable as per original ITR.||xxxx|
|ADD: Fess payable for non-filing of income tax (if any)||xxxx|
|ADD: Additional Tax Payable ( For taking benefit of Section 139(8A)||xxxx|
|TOTAL INCOME TAX LIABILITY||XXXX|
|LESS: TDS/TCS/Advance Tax/Tax Relief etc||xxxx|
|NET TAX LIABILITY UNDER SECTION 140B||XXXX|
Total income as reported in Part BTI of the ITR form shall also be reported here to compute the additional tax payable by the assessee for the update for the updated return under section 140B. Adjustments such as previously paid tax, refund issued to the assessee, and fee for default in the furnishing of return of income under section 234F shall be considered while calculating such additional tax.
How to verify the updated return?
The following are the verification process for ITR-U:
- Digital signature certificate (DSC) in the tax audit cases.
- Electronic verification code (EVC), is given for the non-tax audit cases.
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