Introduction:
Income tax return filing is one such task in India which almost every tax payer knows about but at times forget to complete this compliance. Many times due to certain circumstances or due to negligence or just not getting enough time to complete this compliance makes one forget to file their income tax returns within due date.
There are options given by income tax department to persons in India to file their income tax returns even after the due date. However, even this option expires after a particular time limit and taxpayers are left with no option but to let go of the return filing and often get notices from income tax departments.
Income Tax Department took this matter to address the issues that taxpayers are facing and introduced in the union budget 2022 the concept of ITR – U. ITR – U is the updated return which one can file even after the limit to file belated return lapses. Section 139(8A) deals with ITR-U type of return.
Time limit to file ITR-U return:
ITR-U is a form that allows taxpayers to correct errors or omissions or mistakes in their ITRs filed up to two years from the end of the relevant assessment year to update their return. By availing the provisions of Section 139(8A), taxpayers can rectify any errors or updates in their original return without facing legal consequences for incorrect information.
Let us understand this with an example.
Mr.A has not filed his ITR for AY 2023-24. He has also missed the option to file belated or revised return.
Here due date for filing belated ITR was 31st December, 2023. Mr. A can revise his ITR till 31st March, 2024.
Now, if Mr.A misses both these options to file ITR. Under section 139(8A) Mr. A can still file an updated ITR till 31st March 2026 i.e. two years from end of relevant assessment year i.e. AY 2023-24. End of AY 2023-24 is 31st March, 2024.
Eligibility and ineligibilty to file ITR-U:
Any person who has missed to file ITR or there are error or omission in certain cases, either through original or belated or revised ITR.
ITR-U can be filed only once for every assessment year.
No Nil Return or loss return filing is allowed under ITR – U. You can not claim refund or increase amount of refund through ITR-U. No tax liability reduction is allowed through ITR-U.
No ITR -U is allowed if any kind of search, seizure, survey, pending or completed assessment/reassessment/revision/recomputation.
While proceeding to file ITR U Following aspects are to be kept in mind:
Taxation aspect under ITR-U:
There is an additional tax one will have to pay while filing ITR U which will either be 25% or 50% of the tax amount as the case maybe. This is calculated on the basis of time a person is taking to file ITR-U
| ITR U Filed | Additional Tax |
| Within 12 months from the end of relevant AY | 25% of additional tax + Interest + Late filing fees |
| Within 24 months from the end of relevant AY | 50% of additional tax + Interest + Late filing fees |
Conclusion:
ITR U is an option given by Income Tax Department to save taxpayers from unnecessary scrutiny of not filing ITR within prescribed time limit and not to reduce the original tax liability or enhance the existing refund allotted to them. ITR U filing is subject to payment of additional tax amount and interest as well as late fee or penalty if any. A person can also change ITR form in his ITR U return from his existing ITR form i.e. if a person has filed his original ITR in ITR 1 and now since he wants to disclose additional income he had derived from any other sources let us say from capital gain or from profits from his business or profession then he will no longer be eligible to file ITR 1 and hence he will have to switch to ITR 2 or ITR 3 in his updated return.