This blog provides comprehensive information on the newly introduced provision of filing Updated Income Tax Returns (ITR-U) under Section 139(8A) of the Income Tax Act. It outlines the significance of ITR-U, detailing who can file it, when it can be filed, and the penalties associated with it. It also guides readers through the step-by-step process of filing ITR-U, ensuring clarity and ease of compliance with tax regulations. By offering insights into rectifying errors or omissions in previously filed returns, the blog empowers taxpayers to maintain compliance with tax norms, potentially avoiding penalties and ensuring accurate reporting of financial information.
The provision to file updated Income Tax Returns has been introduced in the Budget for financial year 2022-23, by adding a new Section 139(8A) in the Income Tax Act. Prior to its introduction, the only way to rectify or update omitted information in the ITRs filed during the relevant assessment year, was by filing revised returns u/s 139(5), 3 months prior to the end of the assessment year. Now, with ITR-U, assessees can file updated returns anytime within 24 months after the end of the assessment year.
Another benefit of ITR-U is that while revised returns u/s 139(5) could be filed only if the original returns have been filed u/s 139(1) or 139(4), updated returns can be filed even if the assessee has missed filing his original returns. So, by means of ITR-U, the income tax department has provided a voluntary option to ensure the compliance with the ITR norms under the Income Tax Act of 1961.
What is ITR-U u/s 139 (8A)?
Filing Updated Income Tax Returns is a new provision added by the Finance Act / Budget of Financial Year 2022-23. What it basically entails is that any assessee whether an individual or a body corporate, who has filed Income Tax Returns under Sections 139(1), 139(4), or 139(5) of the Income Tax Act, for the relevant assessment year, can update any incorrect, misleading or omitted information in it. Such updated returns can also be filed if the assessee has not submitted his ITR under any of these sections for the relevant assessment year.
ITR filed u/s 139(1) is the original ITR, filed for the previous financial year, by the 31st of July of the current assessment year. Such ITR is filed without any late fees or penalties. If the assessee has missed filing ITR u/s 139(1) within the due date, he can later file the belated returns u/s 139(4) by submitting the prescribed late fees. The delayed returns u/s 139(4) can be filed within 3 months before the end of the current assessment year, or to be specific, by the 31st of December of the current assessment year. The assessee can file a revised return u/s 139(5) as well, for rectifying any errors made while filing returns u/s 139(1) or 139(4). Even this revised return can be filed by the 31st of December of the current assessment year.
You can see that before the provisions for updated returns were introduced, tax returns, whether original, delayed, or revised could not have been filed after the end of the relevant assessment year. However, with the introduction of ITR-U, the Income Tax Department has removed this restriction altogether.
Due date for filing ITR-U
The updated returns u/s 139(8A) read with section 140B of the Income Tax Act can be filed within 24 months from the date on which the relevant assessment year ends. This has opened a huge window for the income tax assessees to file a new return or rectify the already filed returns. For a clearer understanding, let us consider an example.
Illustration: Suppose, as an assessee, you need to file the returns of your income earned in Financial Year 2020-2021. Your relevant assessment year for this purpose would begin on 31st March 2021 and end on 31st March 2022, in which you can file your original ITR u/s 139(1), and your delayed ITR u/s 139(4) or revised ITR u/s 139(5), if required. If you still have any information to update or rectify in the returns, you have the option to file form ITR-U anytime within 24 months after the end of the assessment year, or by the 31st of March, 2024.
When can you file ITR-U?
As already mentioned earlier, updated Income tax returns can be filed in two cases
- If you have not filed the original ITR in the relevant assessment year
- If you have filed the original, delayed, or revised ITR in the relevant assessment year u/s 139(1), 139(4), or 139(5), of the Income Tax Act, 1961, but
- You had not reported the income correctly
- You chose the wrong heads of income
- You chose the wrong rate of tax
- You need to reduce the carried forward loss
- You need to reduce the unabsorbed depreciation
- You need to reduce tax credit u/s 115JB or 115 JC
However, filing updated returns in ITR-U is forbidden if
- The updated returns is NIL Return or a Return for Loss
- The updated return is decreasing the total tax liability of the assessee
- The updated return is adding or increasing refunds to the assessee by the department
Who is eligible to File ITR-U?
Not all assessees are eligible for filing ITR-U under Section 139 (8A) of the Income Tax Act. You can refer to the table below to know under what circumstances will tax assessees be ineligible to file ITR-U.
| S.No. | Conditions of Ineligibility for filing ITR-U |
|---|---|
|
1 |
A search of the concerned assessee or seizure of its assets & account books have been initiated by the Department u/s 132 of the Income Tax Act |
|
2 |
A survey has been conducted on the assessee u/s 133 of the Income Tax Act (expect 133(2A)) to ascertain his real income or financial condition |
|
3 |
Any assessment, reassessment, recomputation, or revision regarding the assessee under the Income Tax act is pending or has been completed for the relevant assessment year |
|
4 |
The Assessing Officer is aware that the concerned assessee is a legal offender for offences like smuggling, money laundering, benami transactions, etc, in the relevant assessment year and has communicated the same to him prior to filing ITR-U |
|
5 |
The Assessing Officer is aware that the concerned assessee has legal proceeding pending against him in the relevant assessment year and has communicated the same to him prior to filing ITR-U |
|
6 |
The assessee belongs to a country India has signed Double Taxation Avoidance Agreement (DTAA) agreement with |
What is the penalty paid with ITR-U?
According to Section 140B of the Income Tax Act, ITR-U cannot be filed without prescribed penalties and late fees. The amounts concerned for these are decided based on the status of the ITRs already filed, and timeline of filing ITR-U. Below table would be helpful to understand the relevant due date, late filing fee, interest and additional tax.
Income Tax Act Filing During 2023-24 for Several FY
| S.No. | Financial Year | ITR Status | Section | Due Date (Non Audit) | Due Date (Audit) | Due Date (Belated ITR) | Last Date (ITR-U) | Late Fee U/s 234F After Due Date | Additional Tax |
|---|---|---|---|---|---|---|---|---|---|
|
1 |
2022-23
|
New |
139 (1) |
31st July 2023 |
31 Oct 2023 |
31 Dec 2023 |
31 March 2026 |
Taxable Income Upto 5 Lakh - Rs. 1,000 and for Others Rs. 5,000
|
NA |
|
2 |
2021-22 |
Non Filer |
139 (8A) |
31st July 2022 |
31 Oct 2022 |
31 Dec 2022 |
31 March 2025 |
- Do- |
25% of the total tax and interest |
|
3 |
2020-21 |
Non Filer |
139 (8A) |
31 July 2021 |
30 Sept 2021 |
31 March 2022 |
31 March 2024 |
- Do- |
50% of the total tax and interest |
|
Note:
|
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What is the process for Filing ITR-U?
To file updated ITR, you need to first download the excel utility of the concerned ITR, and fill it out completely. Subsequently, you need to generate its JSON file and upload it on the income tax e-filing portal. Once the file is successfully uploaded, the applicant needs to verify it using DSC or EVC, whichever is applicable, and finally submit it on the portal.
However, before beginning the process of filing the updated returns, make sure that you are registered on the income tax e-filing portal, and that you have no tax dues from the assessment year for which you are filing the updated returns. We have elaborated on the stepwise process of filing updated ITR below.
Step 1: Visit the Income Tax e-filing portal. Go to the “Downloads” option on the Menu tab, and in the page you are directed to click on “Income Tax Returns” from the left panel.
Step 2: Select the relevant assessment year and the type of ITR (ITR-1 to ITR-7). From the dropdown, download the “Utility Excel Based” of the concerned type of ITR
Step 3: Once you have downloaded the excel utility of the concerned ITR, fill out the complete details in it, and generate its JSON file. This file needs to be uploaded on the e-filing portal.
Step 4: To upload the JSON file, visit and log into the e-filing portal again. Go to “e-file” option on the menu tab. Next click on “Income tax Returns” on the left panel, and then click on “File Income Tax Returns” from the dropdown. Fill in details like the assessment year, the filing type (updated returns), eligibility for audit u/s 44AB of the Income Tax Act, and finally the type of ITR (ITR-1 to ITR-7).
Step 5: Validate the returns and then go for its verification with the applicable method. If tax audit is applicable then, DSC or Digital Signature Certificate must be used for verification, else an e-verification code or EVC shall be used for verification.
Step 6: After the verification is completed, the updated ITR can finally be submitted on the e-filing portal. You can immediately download the acknowledgement receipt after submission. The application will be processed by the Department in about 30 days from the date of submission.
The Income Tax Department has introduced the provision for updating Income Tax Returns, to give an option of voluntary compliance for filing or rectifying ITR to the assessees. By keeping the window open for as long as 24 months, the Department wants to ensure that all assessees file their returns correctly, even if it is after the end of the relevant assessment year, and with additional tax or interests. We have put in our best efforts to give complete information about ITR-U in this blog. But if you still have any further queries, you can contact us and we will resolve them in no time!
FAQs
Q1: What is ITR-U u/s 139(8A)?
ITR-U is a new provision introduced in the Income Tax Act, allowing taxpayers to update or rectify information in their Income Tax Returns (ITRs) filed under Sections 139(1), 139(4), or 139(5). It provides a voluntary option within 24 months after the end of the assessment year, even if the original returns were not filed.
Q2: When can I file ITR-U?
ITR-U can be filed within 24 months from the end of the relevant assessment year. For example, if the assessment year ends on March 31, 2022, you have until March 31, 2024, to file updated returns.
Q3: Who is eligible to file ITR-U?
Individuals or body corporates who have filed original ITRs under Sections 139(1), 139(4), or 139(5) can file ITR-U. It is applicable if there are errors in reported income, chosen heads of income, tax rates, or if adjustments are needed for carried forward losses, unabsorbed depreciation, or tax credits under specific sections.
Q4: What are the penalties associated with ITR-U?
Penalties and late fees under Section 140B apply based on the status of previously filed ITRs and the timeline of filing ITR-U. Late filing fees range from Rs. 1,000 to Rs. 5,000, and additional tax may apply depending on the taxable income.
Q5: What is the process for filing ITR-U?
To file ITR-U, download the relevant ITR’s excel utility, fill in the details, generate a JSON file, and upload it on the income tax e-filing portal. Verify the uploaded file using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC), and submit it on the portal. The application will be processed by the department within approximately 30 days
The step by step guide for filing ITR-U is really helpful, making the process straightforward for taxpayers.