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The CBDT has notified a new form 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.

Commence from which Financial Year

The return has to be filed Under Section 139(8A) relating to the Assessment Year commencing from 01.04.2020 and subsequent assessment years. The new form (ITR-U) will be available to taxpayers for filing updated income tax returns from the Financial Year 2019-20.

Eligibility of filing ITR-U

Taxpayers filing ITR-U, which can be filed within 2 years of the end of the relevant assessment year, will have to give reasons for updating the income –

  • return previously not filed, or
  • income not reported correctly, or
  • wrong heads of income chosen, or
  • reduction of carried forward loss, or
  • reduction of unabsorbed depreciation, or
  • reduction of tax credit u/s 115JB/115JC, or
  • wrong rate of tax, or
  • any other reasons given by the taxpayers.

Time limit of filing ITR-U

The Budget 2022-23 has permitted taxpayers to update their ITRs within twenty four months from the end of the relevant assessment year.

How many ITR-U can be filed

A taxpayer would be permitted to file only one updated return per assessment year.

New Form ITR-U Under Section 139(8A) for updated Income Tax Returns

How to verify the return

The return can be verified only through a Digital Signature Certificate (DSC) in tax audit cases and filing of return by Electronic Verification Code (EVC) can be an alternative in non-tax audit cases. The option of verification by posting the acknowledgement to Bangalore has not been specified.

Layout of the form

The layout of the form has been kept very precise to help the assessee to input the relevant information easily, only amount of income to be offered to tax is to be specified under the prescribed income heads. No break-up of income or any details information is required to be submitted, unlike the regular ITR forms and the exact reason for filing the updated return is to be submitted in the form itself.

Interest and additional tax payable

If the updated return filed

  • Between 12 to 24monthsfrom the end of the relevant assessment year, pay the due tax and interest along with an additional 50 per cent amount of such tax and interest.
  • Within 12 months from the end of the relevant assessment year, the additional amount will be 25 per cent of the due tax and interest.
 

When an updated return will not be allowed

  • if a prosecution proceeding is initiated by issuing notice for a particular Assessment Year, or
  • if it has the effect of showing a loss, or
  • reducing the total tax liability determined previously, or
  • resulting in a refund, or
  • increases the refund.
 

When the return will be considered invalid

If a taxpayer files an updated return and does not pay the additional taxes then the return would be tendered invalid.

The author is a Member of the CPA Institute, Australia and Fellow member of Institute of Chartered Accountants of India and can be reached at casusmitadutta@gmail.com.

Also Read: CBDT notified Form ITR-U for furnishing updated return under Section 139(8A) and Rule 12AC

Disclaimer: The facts and opinions written in this column are those of the author and have been prepared on the basis of relevant provisions and information available at the time of preparation. The article does not constitute any professional advice or formal recommendation. The author has under taken utmost care to disseminate true and correct views and does not accept liability of any errors or omissions.


  

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