Filing of income tax returns is an important financial responsibility of every taxpayer in India. But as the saying goes, “to err is human”—some people forget the deadline, do not report income, or have errors in their first returns. To help out such taxpayers, the Income Tax Department came up with the ITR-U form, or the Updated Return, under Section 139(8A) of the Income Tax Act, 1961.
The ITR-U form enables the tax filers to correct errors, report unreported income or a missed return within 24 months from the last date of the concerned assessment year. This facility enables people and business entities to follow tax laws without incurring penalties and legal charges.
This article covers all the information you want to know regarding ITR-U, such as who can submit it, when to submit it, and a step-by-step procedure on how to submit it online.
Introduction
Taxes form an important component of financial planning, and each taxpayer is expected to file the returns accurately and within time. There are also situations where people or companies-
- Overlook their income tax return (ITR) filing by the deadline.
- Underreport the income in the initial filing.
- Commit calculation errors leading to incorrect tax payments.
To facilitate taxpayers in rectifying such errors without being subjected to rigorous penalties, the government introduced the ITR-U form. One can use it to revise one’s tax return and pay the additional tax obligation voluntarily.
With the launch in the Union Budget 2022, the ITR-U form is a blessing for taxpayers who would prefer to remain compliant without getting entangled in unnecessary legal complications.
Who Can File ITR-U?
The ITR-U form is for taxpayers who have to revise their already submitted returns or file a return that they skipped. It may be utilized in the following cases-
- Missed Filing Deadline- In case a taxpayer didn’t file their ITR for a specific financial year.
- Unreported Income- In case of partial unreported income (like freelance income, rent income, or capital gains) not reported initially.
- Incorrect Deductions or Exemptions- In case of incorrect deductions or exemptions availed, causing short payment of taxes.
- Faulty ITR Form Filing- If the wrong ITR form was submitted in the return originally.
- Changed Tax Calculations- If incorrect calculation of taxes was made, causing lower taxes to be paid than needed.
Who Can’t File ITR-U?
Not everyone is eligible to file ITR-U. The form cannot be filed in the following circumstances:
- The tax authority has already proceeded with an investigation, search, or survey against the taxpayer.
- The income tax department has already completed or audited the assessment of the return.
- A claim for a refund is being made. The ITR-U form can be used for paying more tax only and not to claim tax refunds.
- If the taxpayer intends to bring forward losses from earlier years.
Time Limit for Filing ITR-U
The Income Tax Department gives taxpayers 24 months from the end date of the relevant assessment year (AY) in which to furnish a revised return.
Let’s take, If the financial year (FY) 2022-23 is equivalent to Assessment Year (AY) 2023-24, then the taxpayer can file the ITR-U up to 31st, March 2026.
The Taxpayers must, however, file ITR-U at the earliest to avoid additional tax liability.
Additional Tax Payable for Filing ITR-U
To avoid late reporting, the government has levied an additional tax on filing ITR-U-
- Between 12 months from the end of the assessment year – 25% additional tax on the amount of due tax.
- Between 12 to 24 months from the end of the assessment year – 50% additional tax on the amount of due tax.
The additional tax facilitates compliance and prevents taxpayers from making late disclosures of income.
Steps to File ITR-U Online
- Step 1. Login to the Income Tax Portal – Go to the Income Tax e-Filing Portal www.incometax.gov.in. You have to login using your PAN and password.
- Step 2. Visit ‘File Income Tax Return’ – Go to ‘e-File’ > ‘Income Tax Return’. Choose the relevant Assessment Year (AY) and choose ITR-U (Updated Return).
- Step 3. Select the Reason for Filing ITR-U – Choose the reason to file ITR-U, such as the missing original filing, under-reported income, or wrong deduction claimed.
- Step 4. Enter the Updated Income Information – There you enter total income, other income, and re-calculated tax payable. The additional tax payable will be calculated automatically by the system.
- Step 5. Pay Additional Tax (if any) – If additional tax is payable, pay it via Challan No. ITNS 280 on the e-filing website.
- Step 6. File ITR-U – Kindly check all details and file the form online. After filing, download the receipt acknowledgment for reference.
Why You Should File ITR-U?
Filing a revised return through ITR-U has various advantages-
- Avoids Tax Notices and Penalties – Voluntary filing of ITR-U minimizes the chances of receiving a tax notice.
- Legal Compliance – Keeps taxpayers in compliance with income tax laws.
- Safeguards Financial Records – A properly filed Income tax return is important for loans, visas, and other investments.
- Minimizes Interest and Additional Tax – The Early filing of the ITR reduces additional tax burden.
Conclusion
The ITR-U form is an excellent solution for taxpayers looking to fix errors, report fresh income, or submit a delayed return. It allows individuals and corporations to correct themselves according to tax laws and avoid unnecessary fines or legal procedures.
By realizing how the process goes and submitting ITR-U within the stipulated time limit, taxpayers are assured of having a clean fiscal report, saving on interest penalty charges, and also being compliant with the Income Tax Department. When you become aware that you made a mistake on your previous taxes, using ITR-U is the optimal manner in which you can correct this before facing probable scrutiny.
Keeping in touch with the tax laws and filing back on schedule ensures that taxpayers escape unnecessary hassles and enjoy easy financial planning for the future.
References
The Income Tax Rules, 1962
The Income Tax Act of 1961 (Act No. 43 of 1961)
