Understand ITR U: Legal, Financial, Real Estate Perspectives

Have you ever missed to disclose income or incorrectly filled out an ITR? Taxpayers now have the opportunity to amend their income tax returns by completing an Updated Income Tax Return  (ITR-U), according to Budget 2022, according to the Finance Minister. 

Therefore, the taxpayer may still file an Updated ITR if the previous ITR contains any errors or omissions, or if the taxpayer failed to file or revise the ITR prior to the due date. In the Finance Bill 2022, the finance minister provided Section 139(8A) of Income Tax Act. Let’s take a look at the amendment, the process of ITR U filing and more about the update in this blog.

What Is ITR-U?: A Look At Section 139(8A) of Income Tax Act

The Central Board of Direct Taxes (CBDT) recently released a new ITR Form U for submitting revised Income Tax Returns, in which taxpayers must specify the precise reason for filing it as well as the amount of earnings to be subject to tax. Taxpayers will have access to the new Form ITR-U to submit amended tax returns for the 2019–20 and 2020–21 fiscal years.

By Notification No. 48/2022 issued 29.04.2022 under G.S.R. 325(E) via Income-tax (Eleventh Amendment) Rules, 2022, the CBDT notified Rule 12AC for submitting an Updated Income Tax Return in Form ITR-U (ITR for updated return) in compliance with section 139(8A) of the Income-tax Act of 1961. (Act).

According to Section 139(8A) of the Income Tax Act, a taxpayer who has submitted an Original ITR under Section 139(1), a Revised ITR under Section 139(5), a Belated ITR under Section 139(4), or no ITR at all, may submit an ITR U, or an Updated ITR, up to 24 months after the conclusion of the applicable assessment year.

In the following situations, an ITR-U cannot be filed:

1. Updated return has been submitted.
2. for submitting a loss or nil return
3. to increase the refund amount or to claim it.
4. when a revised return reduces the amount of tax due
5. A search under Section 132 has been started against you.
6. A survey is carried out in accordance with Section 133A.
7. The Income Tax authorities, pursuant to Section 132A, take or request books, records, or assets.
8. Whether an evaluation, reevaluation, revision, or recalculation is in progress or finished
9. You cannot file an Updated ITR if there is no new tax outlay (where the tax burden is updated with TDS credits and losses and there is no additional tax liability).

As a result, the taxpayer can submit an Updated Return to disclose income that was not disclosed in the earlier ITR and for which they are prepared to pay more tax. Additionally, a taxpayer may only submit an Updated ITR once. No changes may be made to this return.

What is the ITR-U (Updated Return) filing deadline?

In accordance with Section 139(8A) of the Income Tax Act, a taxpayer has 24 months from the conclusion of the applicable assessment year to file an Updated ITR. According to the CBDT's announcement, taxpayers may begin filing Updated ITRs in AY 2020–21.

It is significant to note that taxpayer can only submit an updated ITR pursuant to section 139(8A) after the deadline for submitting a revised or belated ITR pursuant to section 139(4) or 139(5) has passed.

Example: The deadline to submit a late return for AY 2022–23 has already passed (i.e. 31st December 2022). ITR U can therefore be filed for this AY starting on January 1st, 2023, and must be submitted by March 31st, 2025.

AY 2022-23	Due date to file Belated/ Revised Return	31/12/2022
Due date to file Updated Return	31/03/2025
AY 2021-22	Due date to file Belated/ Revised Return	31/03/2022
Due date to file Updated Return	31/03/2024
AY 2020-21	Due date to file Belated/ Revised Return	31/03/2021
Due date to file Updated Return	31/03/2023

(ITR-U deadline)

Should you pay more tax when submitting an ITR-U?

Yes, depending on when you file the ITR-U, you will need to pay an extra tax of 25% or 50% on the tax amount.

ITR-U filed (Timeline)	Additional Tax To Be Paid
12 months from the end of relevant assessment year	25% of additional tax + interest
24 months from the end of relevant assessment year	50% of additional tax + interest

ITR U Penalty: Pay Additional Tax In Accordance With Section 140B Of The Income Tax Act

According to Section 140B of the Income Tax Act, the taxpayer submitting an Amended Return must additionally include documentation of the payment of tax and penalties. Without the payment of additional taxes, ITR U cannot be completed.

Case 1: No ITR was submitted earlier

The following must be paid if the taxpayer has not submitted an Original ITR as required by Section 139(1), a Revised ITR as required by Section 139(5), or a Belated ITR as required by Section 139(4).

1. Taxes due and owing interest in accordance with Sections 234A, 234B, and 234C
2. Section 234F late fee for a late ITR filing
3. Extra Tax

• A 25% additional tax of the total amount of tax and interest is due if a taxpayer files an ITR after the deadline for a revised or delayed ITR but before the period of time of 12 months from the end of the applicable assessment year.
• If a taxpayer submits an ITR after the relevant assessment year has ended but before 24 months have passed since that date, they are required to pay an extra tax equal to 50% of the total amount of tax and interest due.

However, under Sections 89, 90, 90A, 91, 115JAA, or 115JD, such taxpayers may submit a claim for credit for Advance Tax, TDS, TCS, and Relief.

Case 2: Previously filed ITR

The following tax must be paid by the taxpayer if they have submitted an Original ITR under Section 139(1), a Revised ITR under Section 139(5), or a Belated ITR under Section 139(4).

1. After deducting interest that has already been paid, tax on extra income is added on top of interest.
2. Separate tax

• A 25% additional tax of the total amount of tax and interest is due if a person files an ITR after the deadline for a revised or delayed ITR but before the period of time of 12 months from the end of the applicable assessment year.
• If a taxpayer submits an ITR after the relevant assessment year has ended but before 24 months have passed since that date, they are required to pay an extra tax equal to 50% of the total amount of tax and interest due.

Such taxpayers are permitted to seek a credit for any prior taxes paid.

Steps To File ITR-U Form:

The updated ITR form comes in two parts that can be filled in the following manner:

PART A:

(Screenshot from ITR-U)

1. A1 PAN
2. A2 Name 
3. A3 Number on Aadhhar Card
4. A4 Assessment Year 
5. A5 Check the box if you previously submitted a return for the assessment year.
6. A6 If so, check the ITR acknowledgement ("Filed u/s") to see if it was filed in accordance with Section 139(1) or another provision.
7. A7 Enter the form number, acknowledgement number or receipt number, and the original return filing date (DD/MM/YYYY). All of these specifics can be found in the ITR acknowledgement.
8. A8 Review the qualifying requirements listed above and choose the best solution.
9. A9 Pick the appropriate ITR form number.
10. A10 At least one justification for upgrading the ITR-U must now be chosen (multiple selections are allowed)
11. A11 Choose the "12-24 months option" if 12 months have passed since the end of the tax year during which you submitted the return. If not, choose the "up to 12 months option."
12. A12 Enter the assessment year in which they were impacted as a result of the amended return if it reduces the amount of carried-over loss or unabsorbed depreciation. Mention if a previous result was amended or altered.

Part B: ATI Calculation of Updated Total Income and Taxes Due

1. A) Fill in the figures for the extra income under each heading for income. It is not necessary to go out each head in great detail. B) Enter the income reported in the most recent return.
2. Type the total amount of your income. This information is available in "Part B-TI" of the ITR form (1-7) that you completed.
3. The payment amount, if any (You can find it in the Part B-TT, "Amount payable," of the ITR form.)
4. The amount that may be refunded, if any, can be found in Part B-"Refund" TT's section.
5. Enter the amount of tax due according to the most recent return.
6. Nevertheless, if a refund was requested in the previous return, provide the claim amount. ii) If you have already received a refund, provide the whole amount you received, including any interest.
7. Enter the late filing fee if the most recent return was submitted after the deadline.
8. the normal assessment tax that was paid on the most recent return,
9. whole obligation for the additional income
10. Additional tax due on income that has been revised [25% or 50% of (9-7)]
11. Net tax amount due (9 plus 10)
12. Tax previously paid in accordance with Section 140B: If an updated ITR results in a tax liability, the tax liability must be paid as Self-Assessment Tax. Enter the challan information after making the payment.

How to Calculate an Updated Income Tax Return Using a Basic Process?

The method for calculating income tax on an amended return is outlined in Section 140B of the Income Tax Act of 1961.

Total Income Tax Liability = Payable Tax + Interest + Payable Fees for Non-Filing of Income Tax (if any) + Payable Amount as Additional Tax (For Taking Advantage of Section 139(8A)).

Total Income Tax Owed (from above) - TDS, TCS, Advance Tax, Tax Relief, etc. = Net Tax Owed under Section 140B.

Computation of Tax Payable with Updated Return

	Particulars	Amount
	Total Tax on Income	XXXX
Less:	Advance Tax	(XXXX)
Less:	TDS (Tax Deducted at Source)	(XXXX)
Less:	TCS (Tax Collected at Source)	(XXXX)
Less:	Self Assessment Tax	(XXXX)
Less:	Relief u/s 89/90/90A/91	(XXXX)
Less:	Tax Credit u/s 115JAA/115JD	(XXXX)
	Basic Tax Payable	XXXX
Add:	Interest u/s 234A, 234B, 234C	XXXX
	Tax Payable	XXXX
Add:	Additional Tax (25% or 50%) on Tax Payable	XXXX
	Total Tax Payable	XXXX

Difference between an Updated ITR under Section 139(8A) and a Revision under Section 139(5)?

1. Even if an initial or delayed ITR has not been submitted, a taxpayer may nonetheless submit an updated ITR. However, if an original or delayed ITR has not been submitted, the taxpayer cannot file a revised ITR.
2. The taxpayer is not subject to any fines for submitting a revised ITR. However, in accordance with Section 140B, the taxpayer must pay a fine in the form of an Added Tax ranging from 25% to 50% for submitting an amended ITR.
3. Updated ITRs can only be filed if there is a new tax liability; they cannot be filed if there is an increase in refund, a decrease in tax liability, or a claim of a loss. You can file a revised ITR for a variety of reasons, including to claim a loss, enhance your refund, reduce or increase your tax liability, etc.
4. A Revised Return may be submitted more than once by the taxpayer, however an Updated ITR may only be submitted once.

Never Miss Your ITR With NoBroker Legal Experts

In conclusion, it's essential to stay updated with the latest ITR guidelines to ensure that you are filing your returns correctly and avoiding any penalties. With the ever-changing tax laws and regulations, it can be challenging to keep track of all the changes. This is where expert assistance from NoBroker Legal services comes in handy. Their team of tax experts is equipped with the knowledge and experience to guide you through the ITR filing process and help you make the most of your returns. Whether you have questions about the latest ITR U forms, documentation requirements, or any other tax-related queries, NoBroker Legal services has got you covered. So, if you're looking for reliable and professional assistance with your ITR filing, look no further than NoBroker Legal services.

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