Self Assessment Tax & Additional Income Tax: Updated Return u/s 139(8A) Read With Section 140B

Preliminary Information

Any person, whether or not he has furnished a return under Section

• 139(1) or
• 139(4) or
• 139(5),
• for an assessment year (herein referred to as the relevant assessment year),

Opportunity

May furnish an updated return of his income or

1. The income of any other person
2. In respect of which he is assessable under this Act,
3. For the previous year relevant to such assessment year,

• o in the prescribed form,
• o verified in such manner and
• o setting forth such particulars as may be prescribed,

Time Limit

• at any time within twenty-four months
• from the end of the relevant assessment year

Opportunity Not Available under Following Circumstances

Provided that the provision of this sub-section shall not apply, if the updated return,––

(a) is a return of a loss; or

(b) has the effect of decreasing the total tax liability determined on the basis of return furnished under Section

• 139(1) or
• 139(4) or
• 139(5)

(c) results in refund or increases the refund due on the basis of return furnished under under Section

• 139(1) or
• 139(4) or
• 139(5)

of such person under this Act for the relevant assessment year:

Provided further that a person shall not be eligible to furnish an updated return under this sub-section (in case of Requisition, Survey, Search & Seizure Provisions), where––

(a)

• a search has been initiated under section 132 or
• books of account or other documents or
• any assets are requisitioned under section 132A
• in the case of such person; or

(b)

• a survey has been conducted under section 133A,
• other than sub-section (2A) of that section, in the case such person; or

(c)

o a notice has been issued to the effect that any

• money,
• bullion,
• jewellery or
• valuable article or
• thing,

o seized or requisitioned under section 132 or section 132A

o in the case of any other person belongs to such person; or

(d)

o a notice has been issued to the effect that

• any books of account or
• documents,

o seized or

o requisitioned under section 132 or section 132A

o in the case of any other person, pertain or pertains to, or

o any other information contained therein, relate to, such person,

o for the assessment year relevant to the previous year

o in which such

• search is initiated or
• survey is conducted or
• requisition is made and

o two assessment years preceding such assessment year:

Opportunity also Not Available under Following Circumstances:

(a)

o an updated return has been furnished by him

o under this sub-section for the relevant assessment year; or

(b)

o any proceeding for

• assessment or
• reassessment or
• re-computation or
• revision

o of income under this Act
o is pending or
o has been completed
o for the relevant assessment year in his case; or

(c)

o the Assessing Officer has information
o in respect of such person
o for the relevant assessment year

o in his possession

• under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 or
• the Prohibition of Benami Property Transactions Act, 1988 or
• the Prevention of Money-laundering Act, 2002 or
• the Black Money (Undisclosed Foreign Income and Assets) and
• Imposition of Tax Act, 2015 and

o the same has been communicated to him,

o prior to the date of furnishing of return under this sub-section; or

(d)

o information for the relevant assessment year

o has been received under an agreement referred to in

• section 90 or
• section 90A

o in respect of such person and
o the same has been communicated to him,
o prior to the date of furnishing of return under this sub-section; or

(e)

o any prosecution proceedings

o under the Chapter XXII

o have been initiated for the relevant assessment year

o in respect of such person,

o prior to the date of furnishing of return under this sub-section; or

(f)

o he is such person or

o belongs to such class of persons,

o as may be notified by the Board in this regard

Summarised:

• Updated Return can be filed only under following circumstances:

o Results in Increasing Tax Liability
o Any other circumstances not listed below

• Updated Return can not be filed under following circumstances:

o Already Furnished Updated Return
o Loss Return
o Results in Decreasing Tax Liability
o Results in Refund / Increasing Refund

o In case of following proceedings

• Assessment
• Re-assessment
• Re-computation
• Revision
• Requisition
• Survey
• Search & Seizure
• Prosecution
• Smuggling
• Black Money
• Benami Property
• Money Laundering etc.

Section-140B: Self Assessment Tax on Updated Return

140B(1):

• Situation:

No Return of Income furnished u/s-139(1) & 139(4)

• Self-Assessment Tax Payable:

o Tax Payable u/s-139(8A) Updated Return

o Less:

• Advance Tax / Tax Paid
• TDS / TCS
• Tax Relief u/s-89
• Tax Relief / Deduction of Tax u/s-90 or 91
• Tax Relief u/s-90A
• Tax Credit u/s-115JAA or 115JD

o Add:

- Differential Interest u/s-234A, 234B & 234C & Other Interest Payable

• Interest Payable under this Act while furnishing Return U/s-139(8A)
• Less Interest Paid in Earlier Return

- Fee Payable

o Add:

- Additional Income Tax Payable u/s-140B(3)

- Note:

• This amount not to be included in computation mechanism provided u/s-140B(3)

- Otherwise, it would leads to cross reference error in calculation

140B(2):

Situation:

Return of Income furnished u/s-139(1), 139(4) & 139(5)

Self Assessment Tax Payable:

o Tax Payable u/s-139(8A) Updated Return

o Less:

- Advance Tax / Tax Paid

- TDS / TCS

• Included in Earlier Return
• Pertaining to Additional Income offered u/s-139(8A)

- Tax Relief u/s-89

• Included in Earlier Return Only

- Tax Relief / Deduction of Tax u/s-90 or 91

• Included in Earlier Return
• Pertaining to Additional Income offered u/s-139(8A)

- Tax Relief u/s-90A

• Included in Earlier Return
• Pertaining to Additional Income offered u/s-139(8A)

- Tax Credit u/s-115JAA / 115JD

• Included in Earlier Return
• Not claimed in Earlier Return

o Add:

- Refund issued in respect of Earlier Return

- Differential Interest u/s-234A, 234B & 234C & Other Interest Payable

• Interest Payable under this Act while furnishing Return U/s-139(8A)
• Less Interest Paid in Earlier Return

- Fee Payable

o Add:

- Additional Income Tax Payable u/s-140B(3)

- Note:

• This amount not to be included in computation mechanism provided u/s-140B(3)
• Otherwise, it would leads to cross reference error in calculation.

140B(3): Additional Income Tax Payable

• Situation-1:

Return u/s-139(8A) furnished

o After expiry of time limit u/s-139(4) & 139(5)

o Before expiry of 12 months from the end of relevant A.Y.

• Implication:

o Additional Income Tax Payable – 25% of Aggregate

- Differential Tax Payable

- Differential Interest Payable (Refer Explanation (iii) of Section-140(B)

• Interest Payable under this Act while furnishing Return U/s-139(8A)
• Less Interest Paid in Earlier Return

- As determined u/s-140B(1) & 140B(2)

• Situation-2:

Return u/s-139(8A) furnished

o After expiry of 12 months from the end of relevant A.Y.

o Before completion of 24 months from the end of relevant A.Y.

• Implication:

o Additional Income Tax Payable – 50% of Aggregate

- Differential Tax Payable

- Differential Interest Payable (Refer Explanation (iii) of Section-140(B)

• Interest Payable under this Act while furnishing Return u/s-139(8A)
• Less Interest Paid in Earlier Return

- As determined u/s-140B(1) & 140B(2)

Explanation:

• For Computation of Additional Income Tax Payable

o Tax shall include

- Surcharge

- Cess by whatever name called on such tax

o Indirectly, Tax includes

- Fees

- Reason: As determined u/s-140B(1) & 140B(2)

- A Per ITR Form for Updated Return:

• Fees is excluded from Computation Mechanism for Additional Income Tax Payable u/s-140B(3)

Questions Set:

• Whether Interest u/s-234A Payable on Additional Income Tax?

o No

• Whether Interest u/s-234B Payable on Additional Income Tax?

o No

• Whether Interest u/s-234C Payable on Additional Income Tax?

o No

Reason:

• On the basis of

o Self Asssessment Tax Computation Mechanism provided u/s-140B(1) & 140B(2)

o Additional Income Tax Computation Mechanism provided u/s-140B(3)

o Explanation-2 to Section-234A(1), Explanation-3 to Section-234B(1)

Extract of Explanation-2 to Section-234A(1), Explanation-3 to Section-234B(1):

• In this sub-section,

• "tax on the total income as determined under sub-section (1) of section 143 "

• shall not include

• the additional income-tax, if any,

• payable under section 143 .

Questions Set:

• Is there any Additional Income-Tax Payable u/s-143?

• Interpretation of Additional Income-Tax Payable u/s-143?

o Whether Increase in Tax Liability on Regular assessment considered as Additional Income-Tax Payable u/s-143?

140B(4):

• Notwithstanding anything contained in Explanation-1 to Section-234B,

• for the purposes of Section-140B(2),

• interest payable under section 234B

• shall be computed

• On Assessed Tax /

{Assessed Tax – Advance Tax}

• Add:

o Tax on Total Income to be declared u/s-139(8A)

• Less:

o Advance Tax / Tax Paid

o TDS / TCS

• Included in Earlier Return
• Pertaining to Additional Income offered u/s-139(8A)

o Tax Relief u/s-89

• Included in Earlier Return Only

o Tax Relief / Deduction of Tax u/s-90 or 91

• Included in Earlier Return
• Pertaining to Additional Income offered u/s-139(8A)

o Tax Relief u/s-90A

• Included in Earlier Return
• Pertaining to Additional Income offered u/s-139(8A)

o Tax Credit u/s-115JAA / 115JD

• Included in Earlier Return
• Not claimed in Earlier Return

• Add:

o Refund, if any, issued in respect of Earlier Return

140B(5):

• If any difficulty arises in giving effect to the provisions of this section,
• the Board may,
• with the approval of the Central Government,
• by notification in the Official Gazette,
• issue guidelines for the purpose of removing the difficulty.
• Time Limit?

140B(6):

• Every guideline issued under sub-section (5)

• shall be laid before each House of Parliament.

Explanations to Section-140B

i)

- Interest payable under section 234A,

- For the purposes of Section-140B(1),

• What about Section-140B(2)?

- Add:

o Tax on Total Income to be declared u/s-139(8A)

- Less:

o Advance Tax
o TDS / TCS
o Tax Relief / Deduction u/s-90 / 91
o Tax Relief u/s-90A
o Tax Credit u/s-115JAA / 115JD

ii)

1. Interest Payable u/s-234C,
2. for the purposes of Section-140B(2),

• What about Section-140B(1)?

3. shall be computed after taking into account
4. the total income u/s-139(8A)
5. as the returned income

Questions Set:

Whether Updated Return u/s-139(8A) can be furnished, if Self Assessment Tax Payable u/s-140B is Nil:

• Yes?
  • As It Doesn't Results in Refund
• No?