A new form for filing updated IT returns has been announced by the Income Tax Department. In this form, taxpayers should provide the reason for filing and the portion of income to be allowed for taxation purposes. ITR-U is the new form and taxpayers can use it to file updated income tax returns for the financial year 2019-20 and 2020-21.

ITR-U form can be filed within two years from the end of the appropriate assessment year. Taxpayers will have to provide proper reasons for revising the income return not already filed or not reporting the income correctly or choosing the wrong heads of income or reducing carried forward loss.

What is Income Tax Updated Return (ITR-U)

1. File Return of Income Not Filed Earlier

1. Make Corrections in Disclosure in Income Tax Return

1. Fix or Change the Head of Income

1. Reduce the Carry Forward Loss

1. Reduce Unabsorbed Depreciation

1. Reduce Income Tax Credit 

Who Should File ITR-U (Income Tax Updated Return) Form?

Any taxpayer can file an updated return whether he has submitted his original/revised/delayed return of income or not.

When You Can’t Submit an Updated Return?

In the following circumstances, an updated return cannot be furnished if:

1. The updated return is a return of the loss

1. The updated return is reducing the income tax liability from the return filed earlier

1. The updated return result increases the refund

1. The search has been started under section 132

1. Books of accounts or any other document are called for under section 132A.

1. A survey is done under section 133A

1. Any proceeding of assessment, revaluation, recalculation, or revision is pending or completed in that year.

1. The AO has information against such person under the Prevention of Money Laundering Act or Black Money (Undisclosed Foreign Income and Assets) and Tax Act or Benami Property Transactions Act or Smugglers and Foreign Exchange Manipulation Act and the same have been reported to the assessee.

1. Other Notified Person

How to Calculate Income Tax on Updated Return via Simple Process?

Section 140B of the Income Tax Act 1961 provides the procedure to calculate income tax on an updated return.

Payable Tax + Interest + Payable fees for nonfiling of Income Tax (if any) + Payable amount as Additional Tax (For taking benefit of Section 139(8A))= Total Income Tax Liability.

Total Income Tax Liability (from above) – TDS/TCS/Advance Tax/Tax Relief etc = Net Tax Liability u/s 140B.

Additional Tax Liability:

To avail the benefit of section 139(8A), the assessee is required to pay additional tax computed as under:

1. 25% of tax, HEC, SC, and interest as calculated above, if an updated return is to be filed within 12 months from the end of the assessment year.

1. 50% of tax, HEC, SC, and interest as calculated above if an updated return is to be filed after 12 but before 24 months.

Process of filing ITR-U

a. Go to the Download section of the Income Tax Site and select the AY for which you want to file Updated ITR.

b. There you can see the Date of the latest release of JSON Schema as 27th June 2022, At present, you can update ITR 1 and 4 only

c. Download the Excel-based utility and you’ll find the older version of the ITR Excel utility

d. After entering the relevant details in PART A, You can see the Filed u/s option, there you can find Section 139(8A)

e. After selecting the section 139(8A), you can able to see “Part A General Information- 139 (8A), this is ITR – U. There you can fill in the relevant details

f. In the Part A General Information tab, (ITR-U) you can able to see the reason for Updating your return drop-down menu, select the relevant cause from that

g. After filling in all the details you can able to download an XML file which you can file on the Income-tax website by selecting relevant AY in the File Income tax return tab

Created & Posted by Pooja

Income Tax Expert at TAXAJ

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