Finance Act,2022 has introduced a new form ITR-U (updated return) which allows tax payers to file updated income tax returns for earlier years in the following circumstances.
- Income Tax return has already been filed but few incomes have not been reported
- No income tax return was filed.
Earlier there was no option to file return after the end of the relevant assessment year. For instance, before introduction of ITR-U the income tax return for F.Y 2019-20 can be filed before March,21 after which the window for filing will be closed. Now with introduction of ITR-U (Updated return) the income tax return for F.Y 2019-20 can be filed within 2 years from the end of the relevant assessment year i.e.31st March,2023.Even if the return has already been filed for F.Y 2019-20 and if certain incomes have not been reported, then ITR-U can be filed reporting additional income. Similarly for F.Y 2020-21 under above circumstances ITR-U can be filed before 31st March,24.
However, filing of ITR-U is subject to certain conditions and payment of additional taxes.
ITR-U can be filed in the following cases:
- Failed to file Income tax return
- Incomes have been under reported
- Income reported under wrong heads
- Carried forward losses claim to be reduced
- Unabsorbed depreciation claims to be reduced.
- Tax credit reduction under sec.115JB/115JC
- Wrong tax rate application
ITR-U cannot be filed in the following cases:
- Filing loss return / Nil return
- Reducing tax liability
- Claiming refund or increasing refund claim.
- Search proceedings-initiated u/s.132
- Survey cases u/s. 133A
- Books of accounts/documents are requisitioned or seized u/s.132A
- If any proceeding of assessment, reassessment, re-computation or revision is pending or completed for that relevant year.
- If the Assessing Officer has information under specified Acts and the same has been communicated before the date of filing updated return.
- If any information has been received u/s 90 or 90A and same has been communicated to him before the date of furnishing updated return.
- Initiation of any prosecution proceedings before date of filing Updated return.
- Notified persons.
Additional Taxes applicability:
ITR-U comes with additional taxes. If filed with in 12 months from the end of the relevant assessment year then additional taxes to be paid shall be 25% of tax and interest due. If filed after 12months but before 24 months then the additional taxes shall be 50% of tax and interest due.
Its an opportunity given to the tax payers to rectify their errors and report incomes properly. Failure to utilize the facility will result in notices and heavier penalties from the Income Tax department. You can get in touch with our team for filing ITR-U and we assure that the entire process shall be smooth and easier.