ITR U – What is ITR-U Form and How to File ITR-U

ITR-U is the Form that allows you to update your income tax return by rectifying errors or omissions for up to two years from the end of the relevant assessment year. The government introduced the concept of updated returns in the Union Budget 2022.

What is ITR-U?

Have you ever forgotten to report an income or made a mistake in your ITR? 
Section 139(8A) under the Income Tax Act allows you a chance to update your ITR within two years. Two years will be calculated from the end of the year in which the original return was filed. ITR-U was introduced to optimise tax compliance by taxpayers without provoking legal action. Read on to learn more about ITR-U. 

Who can file ITR-U?

Any person who has made an error or omitted certain income details in any of the following returns can file an updated return:

• Original return of income, or 
• Belated return, or 
• Revised return

An Updated Return can be filed in the following cases:

• Did not file the return. Missed return filing deadline and the belated return deadline
• Income is not declared correctly
• Chose wrong head of income
• Paid tax at the wrong rate
• To reduce the carried forward loss
• To reduce the unabsorbed depreciation
• To reduce the tax credit u/s 115JB/115JC

A taxpayer could file only one updated return for each assessment year(AY).
 

Who is not eligible to file ITR-U?

ITR-U cannot be filed in the following cases:

• Updated return is already filed 
• For filing nil return/ loss return
• For claiming/enhancing the refund amount.
• When updated return results in lower tax liability
• Search proceeding u/s 132 has been initiated against you
• A survey is conducted u/s 133A
• Books, documents or assets are seized or called for by the Income Tax authorities u/s 132A.
• If assessment/reassessment/revision/re-computation is pending or completed.
• If there is no additional tax outgo (when the tax liability is adjusted with TDS credit/ losses and you do not have any additional tax liability, you cannot file an Updated ITR)

ITR-U Form Download

What is the time limit to file ITR-U?

The time limit for filing ITR-U is 24 months from the end of the relevant assessment year. 
ITR-U is applicable from 1st April 2022. So during the current financial year 2022-23, you can file ITR-U for AY 2020-21 and AY 2021-22. 
E.g., The Return of FY19-20 can be updated till 31st March 2023.
 

Should you pay additional tax when filing ITR-U?

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

How to file Form ITR-U?

There are two parts to the form- Part A &B. Follow the below-mentioned instructions for filling up the form:

Part A: General information

A1 PAN
A2 Name
A3 Aadhhar Card Number
A4 Assessment Year
A5 Select yes if you filed the return previously for the assessment year.
A6 If yes, look at the ITR acknowledgement (“Filed u/s”) to figure out if it was filed u/s 139(1) or others
A7 Next, enter the form no., acknowledgement no. or receipt no. and date of filing the original return (DD/MM/YYYY). You will find all these details in the ITR acknowledgement.
A8 Check the eligibility conditions mentioned above and select the appropriate option.
A9 Select the ITR form number.
A10 You must now select at least one reason for updating the ITR-U. (multiple selections are allowed)
A11 If 12 months have elapsed from the end of the year in which you filed the return, select ‘12-24 months option’. Else select ‘up to 12 months option’.
A12 In case the updated return reduces the balance of carried forward loss or unabsorbed depreciation, enter the assessment year in which they were affected because of the updated return. Also, mention if a revised or updated return was filed earlier.
 

Part B: ATI Computation Of Total Updated Income And Tax Payable

1. A) Enter the additional income figures in each head of Income. A detailed break-up of each head is not required. B) Enter the income declared as per the last return
2. Enter the Total Income amount. You can find this from ‘Part B-TI’ of the ITR form (1-7) filled by you.
3. The amount payable, if any (You can take it from the – ‘Amount payable’ section of Part B-TT of the ITR form)
4. Amount refundable, if any (You can take it from the – ‘Refund’ section of Part B-TT of the ITR form)
5. Enter the tax payable amount as per the last return.
6. i) However, if a refund was claimed in the last return, then enter the claim amount ii) If you have received the refund, enter the amount of refund received, including the interest amount on such refund.
7. If the last return was filed late, enter the fee paid for late filing.
8. Enter the regular assessment tax paid in the last return
9. Aggregate liability on the additional income
10. Additional tax liability on updated income [25% or 50% of (9-7)]
11. Net tax amount payable (9+10)
12. Tax already paid u/s 140B:  If updated ITR results in a tax payable amount, the same must be paid as a Self-Assessment Tax. Make the payment and enter the challan details.

How to verify ITR-U?

For non-tax audit cases: Digital Signature Certificate (DSC)
For tax audit cases: Electronic Verification Code (EVC)
 

How to compute the tax payable for an updated return?

Your total income tax liability would be as under:
Total Income Tax Liability = Tax Payable + Interest +Late-filing fees + Additional Tax
Net Tax Liability = Total Income Tax Liability (as above) – TDS/TCS/Advance Tax/Tax Relief 

Try the fastest Tax Filing Software for ITR-U. You can file ITR U on the fastest Tax Filing Software, TaxCloudIndia.

How to Prepare ITR-U on TaxCloudIndia?

Before we dive into the step-by-step guide, here’s a quick overview of the entire process:

To prepare an ITR-U on TaxCloudIndia, follow the below-mentioned steps:
 

Step 1: Select the Client/Add the Client

If you have used TaxCloud for filing the ITR, select the return from the home page and then click on the ‘work on client’ button. 
 

If you have filed the ITR through any other platform, click on the ‘import client button’ and upload the JSON file used for filing the ITR. This will recreate the return and help autofill the ITR-U on TaxCloud.
 

Step 2: Enable ITR-U

Once the return is selected or recreated, please ensure the return is marked as ‘Filed’. If not, go to the ‘Advanced Options’ and mark the return as ‘filed’. 
On the next screen, you will see the status message. Click the ‘ITR-U 139(8A)’ button at the bottom right to enable ITR-U.
 

If your client has not filed an ITR for the selected period, go to the ‘Tax Filing’ tab > Click on the ‘Special Options’ tab > ITR-U Enabled.

Step 3: Instructions for filling out the ITR-U Schedules

• General Information- All your general information will be pre-filled based on the return selected or recreated by you.
• Follow the instructions on ‘How to file Form ITR-U?’ mentioned above. However, majority of the fields will be pre-filled for you. You won’t need to look up the numbers in the ITR acknowledgement.

FAQs

What is Form ITR-U?

Form ITR-U is an updated return that allows you to update any of your previous returns within 24 months of filing. ITR U is introduced to improve tax compliance by taxpayers without involving litigations.

Is there any penalty for ITR-U?

No penalty is levied for filing ITR-U. However, an additional tax shall be levied u/s 140B. The additional tax is 25% or 50% of the tax and interest due, depending on whether the ITR-U is filed within 12 or 24 months from the end of the relevant assessment year.

Can nil return be filed in ITR-U?

No, you cannot file a Nil return in ITR-U. ITR-U cannot be filed when there is no additional outflow of tax.

What are the benefits of filing Form ITR-U?

By filling out ITR-U, one can avoid the Scrutiny assessment u/s 143(3), best judgement assessment u/s 144, and income escaping assessment u/s 147. One can also avoid the hassle of a survey, search and seizure proceedings. 

Can I file ITR-U if I have missed filing my ITR within the original due date?

Yes, you can file ITR-U even if you missed the original ITR filing deadline. However, you will have to pay the late filing fee u/s 234F and additional liability of 25% or 50% on the tax payable.

Can refund be claimed in ITR-U?

No, ITR-U cannot be filed in the following cases: claiming a refund, increase in the refund amount, nil return or filing a loss return. Therefore, you cannot claim a refund in ITR-U.

Can I exhaust my balance Tax Payment Challans and claim them against the tax dues under ITR-U?

No, if you have any pending Advance Tax challan or Self-Assessment Tax challan, the same should be reported u/s 140B(2), and the credit shall not be provided.

Can I claim Extra carry forward loss under ITR-U?

No, as per section 139(8A), you cannot enhance your carryforward loss. You can only reduce the carryforward loss balance.

Can I file ITR-U if I do not have any tax payable?

No, if your total tax is adjusted with TDS credit and you do not have any additional tax liability, you cannot file an Updated ITR. 

Can I file ITR-U if my total income is below 5 lakhs and I have claimed rebate u/s 87A?

Yes, you can file the updated return, but you will be liable for late filing fees. The same must be paid, and the payment details must be updated under the “Taxes Paid under 140B” tab. 

Can I change the ITR form number when filing an ITR-U or updated return?

Yes, if you had filed ITR-1 for an assessment year and the updated return changes to ITR 2/3/4 due to the declaration of an additional source of income, such a submission will be accepted.