Budget 2022 has introduced the new section 139(8A) in Income Tax Act, 1961. Refer budget update @ Introduction of new Income Tax ‘Updated’ Return Type. Section 139(8A) enables the filing of “Updated Return” (aka ITR-U) by the taxpayers. Section 139(8A) has come into effect from 01st Apr 2022.
Updated Returns can be filed by the taxpayers who have not filed the return or have filed the returns u/s 139(1)- Original, 139(4)-Belated and 139(5)-Revised. The Objective of introducing this facility is to promote voluntary tax compliance and reduce litigation.
1. Persons eligible for filing Updated Return u/s 139(8A)
All persons (Individual, HUF, Firms/LLP, Companies, AOP, BOI etc) are eligible to file Updated returns u/s 139(8A). But the taxpayers needs to meet the following criteria to file the updated returns
- The Updated return can be filed only if the taxpayer has not filed the return of income earlier or there are errors/omissions in original filed return.
- The Updated return can be filed only if the taxpayer has to disclose any additional income which was missed earlier and should pay additional taxes.
2. Persons not eligible to file Updated Return u/s 139(8A)
All persons (Individual, HUF, Firms/LLP, Companies, AOP, BOI etc) are eligible to file Updated returns u/s 139(8A). But the updated return cannot be filed in below cases.
- updated return is already filed
- For filing nil return/ loss return
- For claiming/enhancing the refund amount.
- When updated return results in lower tax liability
- Search proceeding u/s 132 has been initiated against you
- A survey is conducted u/s 133A
- Books, documents or assets are seized or called for by the Income Tax authorities u/s 132A.
- If assessment/reassessment/revision/re-computation is pending or completed.
If there is no additional tax outgo (when the tax liability is adjusted with TDS credit/ losses and you do not have any additional tax liability, you cannot file an Updated ITR)
IMPORTANT NOTE
As a result of furnishing of an ‘updated’ return for any financial year, if the following is reduced for any subsequent year, then the person shall be required to file an ‘updated’ return for each subsequent year that was filed.
- Loss or any part thereof carried forward under Chapter VI; or
- Unabsorbed depreciation carried forward under Section 32(2); or
- Tax credit carried forward under Section 115JAA; or
- Tax credit carried forward under Section 115JD
3. Time Limit to file Updated Returns
The time limit for filing an updated income tax return (ITR-U) is 24 months from the end of the relevant assessment year (AY). For example:
| Financial & Assessment Year | Last date to file ITR-U |
| FY 20-21 (AY 2021-22) | 31st March 2024 |
| FY 21-22 (AY 2022-23) | 31st March 2025 |
| FY 22-23 (AY 2023-24) | 31st March 2026 |
| FY 23-24 (AY 2024-25) | 31st March 2027 |
4. Penalty / Additional Tax Payable
The deadline for taxpayers to file updated income tax returns has been extended from two years to four years from the end of the relevant assessment year. This extension facilitates voluntary compliance with tax provisions by providing taxpayers with more time to file and rectify their tax returns, ensuring a smoother and more efficient taxation process. Additionally, taxpayers must pay the applicable additional tax while filing the updated return (ITR-U), as outlined below:
| ITR-U filed within | Additional Tax |
| 12 months from the end of the relevant AY | 25% of additional tax (tax + interest ) |
| 24 months from the end of the relevant AY | 50% of additional tax (tax + interest ) |
| 36 months from the end of the relevant AY | 60% of additional tax (tax + interest ) |
| 48 months from the end of the relevant AY | 70% of additional tax (tax + interest ) |
Filing belated or revised income tax returns (ITRs) after December 31st of the assessment year (AY) is not permitted. However, from January 1st of the same AY, taxpayers can file an updated return (ITR-U) to rectify minor errors or omissions in their original ITR. It is important to note that ITR-U cannot be used to reduce tax liability, claim refunds, or increase reported losses.
Note: Section 140B provides for payment and computation of tax, interest, fee and additional income tax on updated return
Updated Income Tax Filing is newly introduced that requires attention, in case you need a tax expert help, do not hesitate to reach us or take the service @ Updated Income Tax Filing Plan
5. ITR Form for filing Updated return and details required
“ITR-U” has been notified by the Income Tax Department for filing updated return u/s 139(8A). The following are the details required to be furnished in ITR-U. The following are the information required to be given in ITR-U apart from the general information
Updated Income Tax Return (aka “ITR-U” ) is new and IT Department haven’t given any guidelines for enabling straight-thru-process (STP) yet. At the same time, its difficult for individuals to self-file their ITRs.
In case any difficulty, do not hesitate to reach [email protected] +91 94057 78105
How to file Form ITR-U?
As per the Income tax rules, the updated return (ITR-U) has to be furnished along with an updated version of the applicable ITR form (ITR 1 – 7).
There are two parts to the form- Part A &B. Follow the below-mentioned instructions for filling up the form.
Part A: General information
A1 PAN
A2 Name
A3 Aadhhar Card Number
A4 Assessment Year
A5 Select yes if you filed the return previously for the assessment year.
A6 If yes, look at the ITR acknowledgement (“Filed u/s”) to figure out if it was filed u/s 139(1) or others
A7 Next, enter the form no., acknowledgement no. or receipt no. and date of filing the original return (DD/MM/YYYY). You will find all these details in the ITR acknowledgement.
A8 Check the eligibility conditions mentioned above and select the appropriate option.
A9 Select the ITR form number.
A10 You must now select at least one reason for updating the ITR-U. (multiple selections are allowed)
A11 If 12 months have elapsed from the end of the year in which you filed the return, select ‘12-24 months option’. Else select ‘up to 12 months option’.
A12 In case the updated return reduces the balance of carried forward loss or unabsorbed depreciation, enter the assessment year in which they were affected because of the updated return. Also, mention if a revised or updated return was filed earlier.
Part B: ATI Computation Of Total Updated Income And Tax Payable
- A) Enter the additional income figures in each head of Income. A detailed break-up of each head is not required. B) Enter the income declared as per the last return
- Enter the Total Income amount. You can find this from ‘Part B-TI’ of the ITR form (1-7) filled by you.
- The amount payable, if any (You can take it from the – ‘Amount payable’ section of Part B-TT of the ITR form)
- Amount refundable, if any (You can take it from the – ‘Refund’ section of Part B-TT of the ITR form)
- Enter the tax payable amount as per the last return.
- i) However, if a refund was claimed in the last return, then enter the claim amount ii) If you have received the refund, enter the amount of refund received, including the interest amount on such refund.
- If the last return was filed late, enter the fee paid for late filing.
- Enter the regular assessment tax paid in the last return
- Aggregate liability on the additional income
- Additional tax liability on updated income [25% or 50% of (9-7)]
- Net tax amount payable (9+10)
- Tax already paid u/s 140B: If updated ITR results in a tax payable amount, the same must be paid as a Self-Assessment Tax. Make the payment and enter the challan details.
