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Writer's pictureIndrajeet Sharma

Section 139(8A): Updated Return (ITR-U)

Updated: Sep 28

Section 139(8A): Updated Return (ITR-U)

Filing income tax returns can often be a complex and confusing task, especially if you realize that you’ve made an error after submission. Fortunately, the Income Tax Department has introduced a solution for such situations—ITR-U. Under Section 139(8A) of the Income Tax Act, the ITR-U form allows taxpayers to rectify mistakes or omissions in their previously filed income tax returns,

including inaccuracies related to income, deductions, and tax credits. This form provides a chance to correct errors without facing penalties or legal hassles, making it a crucial tool for taxpayers.


The ITR-U can be filed for various scenarios, such as when you need to report income that was omitted earlier or correct a miscalculation that affects your tax liability. In this article, we will explore what the ITR-U form is, why it’s essential for taxpayers, and the step-by-step process for filing it, along with important sections like the eligibility criteria and timelines for submission.

 

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Latest Update on Income Tax Returns

Filing belated or revised Income Tax Returns (ITRs) after December 31st of the assessment year (AY) is not possible. However, starting January 1st of the AY, you can file an updated return using the ITR-U form. This form is specifically designed to correct minor errors or omissions in your original ITR. Please note that when using ITR-U, you cannot reduce the taxes owed, claim refunds, or increase losses.

The deadline to file your ITR-U for the financial year 2023-24 (AY 2024-25) is March 31, 2027.


Important Note: The last date for filing ITR-U for AY 2022-23 is March 31, 2025.


What is ITR-U?

The ITR-U, or Updated Income Tax Return, is a form that allows taxpayers to update their ITRs by correcting any errors or omissions. It also provides an option for taxpayers who have not filed their ITR within the due date and missed the belated return deadline. You can file an ITR-U within two years from the end of the relevant assessment year. For instance, if you filed an ITR for AY 2023-24 and missed the revised or belated return filing window, you can still submit an ITR-U after the assessment year ends on March 31, 2024, but no later than March 31, 2026. Please note that ITR-U filing for AY 2023-24 began on January 1, 2024.


Section 139(8A) of the Income Tax Act allows you to update your ITR within two years from the end of the year in which the original return was filed. The introduction of ITR-U aims to enhance tax compliance among taxpayers without prompting legal action.



Empowering the Assessee: Filing an Updated Return


With the introduction of Section 139(8A), taxpayers are given the flexibility and freedom to rectify, amend, or update their income tax returns within the specified timeframe. The provision allows individuals to revisit and revise their financial records, incorporating any changes or new information that may impact their tax liability.


Who can file ITR-U?


Any individual who has erred or omitted income details in one of the following types of returns can file an updated return:


  • Original return of income

  • Belated return

  • Revised return


An updated return can be filed in the following scenarios:

  • Failure to file the return, missing both the return filing deadline and the belated return deadline.

  • Incorrect declaration of income.

  • Selection of the wrong head of income.

  • Payment of taxes at an incorrect rate.

  • To offset carried forward losses.

  • To offset unabsorbed depreciation.

  • To offset tax credits under sections 115JB/115JC.

A taxpayer can file only one updated return for each assessment year (AY).


Who is Not Eligible to File ITR-U?


ITR-U cannot be filed in the following circumstances:

  • An updated return has already been filed.

  • Filing a nil return or a loss return.

  • Seeking to claim/enhance the refund amount.

  • When the updated return results in a reduced tax liability.

  • Initiation of search proceedings under section 132.

  • Conducting a survey under section 133A.

  • Seizure or requisition of books, documents, or assets by the Income Tax authorities under section 132A.

  • If assessment/reassessment/revision/re-computation is pending or completed.

  • When no additional tax is payable (i.e., when the tax liability is adjusted with TDS credit/losses, and there is no additional tax liability).

  • ITR-U Form Download

  • To access the ITR-U form, download it from the official website.


What is the Time Limit to File ITR-U?


The time limit for filing ITR-U is 24 months from the end of the relevant assessment year. ITR-U became applicable from April 1, 2022. Therefore, during the current financial year 2022-23, you can file ITR-U for AY 2020-21 and AY 2021-22. For instance, the return for FY 2019-20 can be updated until March 31, 2023.



Penalty for Filing Updated Return

When filing an updated return, a penalty is applicable. The penalty structure is as follows:

  • Filed within 12 months from the end of the relevant assessment year: A penalty equal to 25% of the aggregate of tax and interest payable upon filing the updated return.

  • Filed after 12 months from the end of the relevant assessment year: A penalty equal to 50% of the aggregate of tax and interest payable upon filing the updated return.

It's essential for taxpayers to be aware of these penalties and their timelines when considering the filing of an updated return.


Conditions under which ITR-U can be filed

Condition 1: Additional Income and Increased Tax Liability


The updated return can be filed when the taxpayer needs to report additional income, resulting in a higher tax liability compared to the original return.


Condition 2: Single Updated Return per Assessment Year


Only one updated return can be furnished for a specific assessment year. It is important to ensure that any necessary revisions or amendments are incorporated in this single updated return.


Condition 3: Imposition of Additional Tax and Interest


If the updated return is filed within 12 months or 24 months from the conclusion of the assessment year, an additional tax will be levied at a rate of 25% or 50% of the average tax, respectively. Corresponding interest will also be applicable. Proof of payment of the required tax, interest, late filing fees, and additional tax must be provided while filing the updated return.

ITR-U filed within

Additional Tax

12 months from the end of relevant AY

25% of additional tax (tax + interest )

24 months from the end of relevant AY

50%  of additional tax (tax + interest)


Condition 4: Exceptions to Updated Return Filing


Certain scenarios exempt the filing of an updated return. This includes cases where the return reflects a loss, decreases tax liability, or results in a refund. Additionally, the updated return cannot be filed in situations involving search and seizure, ongoing prosecution proceedings against the taxpayer, or pending/completed assessment, reassessment, revision, or re-computation.



Exploring the Eligibility and Timeline for Updated Returns, section 139(8A)


Eligibility: Any Person, Regardless of Prior Filings


The ground of Updated Returns lies in their accessibility to all individuals, regardless of whether they have previously filed a return under Section 139(1), Section 139(4), or Section 139(5) of the Income Tax Act. This provision opens the door for anyone to rectify any inaccuracies or changes in their original tax return submission.


Timeline: Within 24 Months from the End of the Relevant Assessment Year


To ensure compliance and timely submission, it is important to be aware of the precise timeframe for filing an Updated Return. According to the regulations, individuals have a period of 24 months from the conclusion of the relevant Assessment Year to submit their Revised Return.


Exceptions to the Updated Return Provision: A Closer Look


When it comes to filing an Updated Return, it's important to understand that there are exceptions to this provision. In this article, we explore the circumstances in which the ability to submit an Updated Return does not apply. Let's dive into each exception and gain a comprehensive understanding of its implications.


Exception 1: Returns Reflecting Loss


The first exception arises when the Updated Return pertains to reporting a loss. In such cases, the provision for filing an Updated Return does not apply. This means that if the revised return shows a loss, individuals are not eligible to avail themselves of the Updated Return option. It is important to note that this exception specifically pertains to returns that result in a loss.


Exception 2: Decreased Tax Liability


The second exception applies when the Updated Return has the effect of reducing the total tax liability that was determined in the original return filed under Section 139(1), Section 139(4), or Section 139(5). In other words, if the revised return shows a decrease in the overall tax liability calculated based on the original return, the option to file an Updated Return is not applicable.


Exception 3: Refund Due


The third exception comes into play when the Updated Return results in a refund that is due based on the original return filed under Section 139(1), Section 139(4), or Section 139(5). In such cases, if the revised return shows that a refund is owed to the taxpayer, the provision for filing an Updated Return does not apply.


Exception 4: Increased Refund


The fourth and final exception relates to cases where the Updated Return leads to an increase in the refund amount that was determined based on the original return filed under Section 139(1), Section 139(4), or Section 139(5). If the revised return demonstrates a higher refund amount owed to the taxpayer, the option to file an Updated Return is not applicable.


How to File Form ITR-U?

To file Form ITR-U, follow these steps:

  1. Visit the Income Tax Department's Portal: Go to the official website of the Income Tax Department.

  2. Log in to Your Account: Use your credentials to log in to your e-filing account.

  3. Select the Appropriate ITR Form: Choose Form ITR-U from the list of available forms. This form is specifically for taxpayers wishing to rectify or update their previously filed income tax returns.

  4. Fill Out the Form: Complete the required fields with accurate information, ensuring that all details match your records.

  5. Upload Supporting Documents: If necessary, attach any supporting documents that validate your claims or corrections.

  6. Review Your Details: Carefully review all entered information to avoid any errors.

  7. Submit the Form: Click on the “Submit” button to file your Form ITR-U.

  8. Pay Any Applicable Fees: If there are any fees associated with filing, complete the payment process.

  9. Receive Acknowledgment: After submission, you will receive an acknowledgment receipt. Save this for your records.

By following these steps, you can successfully file Form ITR-U. If you encounter any difficulties, consider seeking assistance from a tax professional.


FAQs:

Q1. Can an updated return be filed multiple times for a given assessment year?

Multiple filings for an updated return under section 139(8A) are not permitted for the same assessment year. Once the updated return has been submitted, it cannot be revised, altered, or canceled.


Q2. What does an Updated Return (ITR U) entail?

ITR U allows assessees to file returns after the due date or make changes to previously filed returns with expired revision dates. This provision is established under section 139(8A) of the Income Tax Act, 1961.


Q3. What are the advantages of filing an updated return under section 139(8A)?

Filing an updated return offers several benefits, including the ability to rectify undisclosed income from earlier returns, protection against legal proceedings and prosecution, and a reduction in potential litigation.

Q4. How many times an updated return can be filed for any assessment year?

No. More than one filing for an updated return under section 139(8A) cannot be made for the same assessment year. Once furnished, the updated return shall not be revised or modified or withdrawn.


Q5. What is an Updated Return (ITR U)?

An updated return under ITR U allows assessees to file returns after the due date or even revise returns filed at an expired revision date. The said provision is laid down under Section 139(8A) of the Income-tax Act, 1961.


Q6. What are the advantages associated with filing an updated return under section 139(8A)?

An updated return will have the following advantages: it will allow non-disclosed income in the earlier returns to be declared; it will protect against legal proceedings for prosecution, and, therefore, reduce the chances of litigation.


Q7. Who can file a revised return under section 139(8A) of the Income-tax Act?

All taxpayers whether individuals, companies, or an entity who failed to file a return within the due date or is required to correct earlier filed returns under this act can file a revised return under section 139(8A).


Q8. What are the conditions that are to be satisfied for filing a revised return?

These conditions are that the taxpayer should not have got any notice of assessment or reassessment for the relevant year, and the updated return shall be filed within 24 months from the end of the relevant assessment year.


Q9. Are there any penalties for filing a revised return under section 139(8A)?

The additional tax, as called for, and the interest under the Act may be levied on account of filing an updated return under section 139(8A) by taxpayers, but they shall not be liable for any penalty relating to filing or incorrect filing of the original return.


Q10. What are documents required to be filed with the updated return?

The taxpayer is going to need to file the same documentation as if he was filing the original return, such as proof of income, deductions, and any other information that pertains to the adjustments claimed on the return.




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