ITR-U- What is ITR-U and Who Can file the return
Missed your Income Tax Due Date Deadline ? Don't Panic, here's what you can do.
If you have filed your Income Tax Return (ITR) for the Previous Financial Year and later realized that you have made some mistakes or missed some details, don't worry. You can Still rectify your errors by filing an updated return under Section 139(5) of the Income Tax Act, 1961. This Articles will explain the process and benefits of filing an updated return as per Income Tax Rules.
What is updated return?
An Updated return is revised return of the Original or defective return filed by a taxpayer. it allows the taxpayer to correct any errors or omissions in the original return, such as wrongly personal details, incorrect income or deductions mismatched tax credits, etc. An updated return can also file to claim a refund of excess tax paid or to pay additional tax due.
Who can file an updated return?
Any Taxpayer who has filed a return under section 139(1) or in response to a notice under section 142(1) can file an updated return if they discover any mistake or omission in the original return. However, there are some Conditions and limitations for filing an updated return, such as:
- The Updated Return can be filed only before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier For example, for the financial year 2020-21, the updated return can be filed with March 31, 2022 or before the assessment is completed by the tax department, whichever is earlier.
- The Updated Return can be filed only once for a particular assessment year. However, if the original return was defective and the tax department issued a notice under Section 139(9), then the taxpayer can file an updated return more than once to rectify the defects.
- The Updated Return can be filed only online through the e-filing portal of the income tax department. The Taxpayer has to select the option of "Revised Return" and mention the acknowledgement number and date of filing of the original return.
- The Updated Return should have the same form and manner as the original return. For Example, if the original return was filed using ITR-1 Form, then the updated return should also be filed using ITR-1 form.
- The Updated return should have all the details of Income, deductions, taxes, etc., as per the latest information available with the taxpayer. The Taxpayer cannot omit or add any new source of income or deduction in the updated return.
Who cannot file the Updated Return?
- If an Updated return cannot be filed if it reflects total income as a loss.
- If an Updated return cannot be filed if it decreases the total tax liability determined based on an easier return
- If an Updated return cannot be filed if it results in a refund or increases the refund previously due on the basis of an earlier return.
- If an Updated return cannot be filed for the assessment year relevant to the previous year in which a search is initiated under section 132 and for any assessment year preceding such assessment year. For example, if a search was initiated on 01-06-2023, the updated return cannot be filed for the Assessment year 2024-25 and year preceding such assessment year.
- If books of account or other documents or any assets are requisitioned under section 132A
- If a survey conducted against the assessee under section 133A.
- If an Assessee shall not be eligible to file an updated return of the Year of which assessment or reassessment or recomputation or revision is pending or has been completed.
Time limit for filing the Updated Return?
The Provision of updated returns is effective from 01-04-2022, and the time limit provided for filing an updated return is 24 months from the end of the relevant the assessment year For Example, In Financial year 2023-24, a person can file an updated return for AY 2021-22 and AY 2022-23.
Tax on Updated Return?
The Provisions of section 140B provide for payment and computation of tax, interest, fee and additional income on updated returns. The Updated return shall be accompanied by the proof of tax payment. i.e., Normal tax (if any), additional tax, interest and fee as required under section 140B otherwise it shall be treated as a defective return.
-If an Assessee files the ITR-U within 12 Months from end of the relevant Assessment year - 25% additional Tax plus Interest and Late filing fee as per Income Tax Act.
-If an Assessee files the ITR-U within 24 Months from end of the relevant Assessment year- 50% additional Tax plus Interest and late filing fee as per Income Tax Act.
What are the benefits of filing an updated return?
Filing an Updated return can help the taxpayer in many ways, such as:
- Avoiding penalties and interest for incorrect or incomplete reporting of income or taxes.
- Claiming refunds of excess tax paid or reducing tax liability for additional income or deductions.
- Matching tax credits with Form 26AS and avoiding mismatch notices from the department.
- Avoiding scrutiny or assessment proceedings by the tax department for erroneous or defective returns.
- Rectifying any adverse impact on credit score or loan eligibility due to incorrect tax filing.
How to file an Updated Return?
The process of filing an updated return is similar to filing a regular return, except that the taxpayer has to select the option of "revised return" and mention the acknowledgement number and date of filing of original return. The Steps are as follows:
- Login to the e-filing portal of the Income Tax Department using your User ID and Password.
- Go to "e-file" and select the Income Tax Return.
- Select the assessment year for which you want to file an updated return and choose 'Revised Return' under 'Filing Type'.
- Enter your PAN and Select ' ITR-Form Number' as per your Income and deduction. Click on 'Continue'.
- Enter your acknowledgement number and date of filing of your original return. Click on ' Continue.
- Fill in all the details of income, deduction, taxes, etc., as per your latest information. Make sure to correct any errors or omissions that you had make in your original return.
- Verify and submit your updated return using your digital signature (DSC) or electronic verification code (EVC).
- You will receive an acknowledgement number and date for your updated return, you can check the status of your updated return on the e-filing portal.
Conclusion.
Filing an updated return is simple and convenient way to rectify any mistakes or omission in your original income tax return. it can help you avoid penalties, interest, notices, and scrutiny from the tax department. it can help you claim refunds or reduce your tax liability as per latest information. However, you should file an updated return only within the prescribed time limit and only once for a particular assessment year. You should also ensure that your updated return is accurate and complete in all respects.
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