Form ITR-U for filing Updated Return

Form ITR-U for filing Updated Return

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 Form ITR-U for Filing Updated Return

The Finance Act, of 2022 has introduced a new concept of updated return, which has permitted taxpayers to update their ITRs within two years of filing, subject to payment of taxes.

The Central Board of Direct Taxes (CBDT) has now notified a new Form ITR-U for filing updated Income Tax returns in which taxpayers will have to give the exact reason for filing it along with the amount of income to be offered to tax. The new Form ITR-U will be available to taxpayers for filing updated income tax returns for 2019-20 and 2020-21 fiscals.  The present article briefs the Form ITR-U for filing Updated Return.

Know more about ITR Forms for the AY 2022-23 or FY 2021-22

The Gist of CBDT Notification

CBDT vide Notification No. 48/2022 dated 29.04.2022 in G.S.R. 325(E) through Income-tax (Eleventh Amendment) Rules, 2022 notified Rule 12AC for furnishing Updated Return of Income in Form ITR-U (ITR for updated return) as per the provisions of section 139(8A)  of the Income-tax Act, 1961 (Act).

Updated Return

Finance Act, 2022 introduced the concept of furnishing income tax returns i.e. ‘Updated Return’ for offering additional income to tax subject to payment of additional income tax. For this purpose, section 139(8A) is inserted in the Income Tax Act to provide for furnishing Updated Return of Income in the prescribed form and manner and shall contain prescribed particulars.

The CBDT has now notified Rule 12AC  and new Form ITR-U for filing of such updated return of income vide the Income-tax (Eleventh Amendment) Rules, 2022.

Income-tax (Eleventh Amendment) Rules, 2022 – Form ITR-U

CBDT vide through Income-tax (Eleventh Amendment) Rules, 2022 notified Rule 12AC for furnishing Updated Return of Income in Form ITR-U (ITR for updated return) as per the provisions of section 139(8A) of the Income-tax Act, 1961 (Act).

New Rule 12AC of IT rules

Rule 12AC of the IT Rules states that updated return under Section 139(8A), relating to the assessment year commencing on April 01, 2020, and subsequent assessment years, shall be in the Form ITR-U and be verified in the manner indicated therein.

Form ITR-U

Form ITR-U is notified for persons to update income within twenty-four months from the end of the relevant assessment year under section 139(8A) and Rule 12AC.

Form ITR-U

Taxpayers filing ITR-U will have to give reasons for updating the income:

  • Return previously not filed  
  • Income not reported correctly
  • Wrong heads of income chosen
  • Reduction of carried forward loss
  • Reduction of unabsorbed depreciation  Reduction of tax credit u/s 115JB/115JCo
  • Wrong rate of tax

Eligible Person to File Updated Return

Refer to the following table to know about the Eligible Person to File Updated Return:

 Eligible Person to File Updated Return

Eligible Person to File Updated Return
  • An updated return can be filed even by a person who has not filed any return of income under section 139 for the relevant assessment year.
  •  In case a person has already furnished a return of income then he can file the return only for disclosing additional income

Manner of Verification of ITR-U

  • A company or a political party or a person who is subject to compulsory tax audit u/s 44AB is required to furnish an Updated Return of Income under DSC.
  • In other cases, DSC is not mandatory and an updated return can be furnished with EVC or voluntarily with DSC.

Prescribed Date to file Form ITR-U

Form ITR-U can be filed within two years of the end of the relevant assessment year. The provisions of section 139(8A) related to the filing of an updated return of income have come into effect from 01.04.2022. Hence, in the financial year 2022-23, updated returns for AY 2020-21 and AY 2021-22 can be furnished.

An updated return of income can be furnished only once for the relevant assessment year. Hence, taxpayers should be very careful in filing Form ITR-U. There is no provision to revise the updated return.

Payment of Additional Tax

As mentioned above, To provide an opportunity for taxpayers to correct errors incurred in the ITR & Annual Information Statement (AIS), Finance Minister proposed a new provision called updated return. It is permitting taxpayers to file an updated return on payment of additional tax.

An additional 25 percent on the due tax and interest would have to be paid if the updated ITR is filed within 12 months, while the rate will go up to 50 percent if it is filed after 12 months, but before 24 months from the end of relevant Assessment Year.

  • Taxpayers looking to file the same for fiscal 2019-20 will need to pay the due tax and interest along with an additional 50 percent amount of such tax and interest.
  • For those looking to file for FY2020-21, the additional amount will be 25 percent of the due tax and interest.

Also, if a taxpayer files an updated return and does not pay the additional taxes then the return would be rendered invalid.

Cases when an updated return of income cannot be furnished

The form ITR-U cannot be filed for the following reasons:

  • Where a search has been initiated under section 132 or requisition is made under section 132A of the Income-tax Act
  • Where a survey has been conducted u/s 133A other than survey u/s 133(2A) of Income-tax Act
  • Where any proceeding for assessment or reassessment or recomputation or revision of income is pending under the Income-tax Act
  • Where the Assessing Officer has information for the relevant assessment year Blank Money law, Benami law, etc.
  • Where any information is received under an agreement referred to in sections 90 or 90A of the Income-tax Act
  • Where any prosecution proceedings are initiated under the Income-tax Act:

The official notification about the Income-tax (Eleventh Amendment) Rules, 2022 – Form ITR-U is attached here for reference:

Form ITR-U for filing Updated Return

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