Guest Column

Income-Tax: Who Can File, How To File, When To File Updated Return

Abhishek Aneja

Many a times, people forget to file their Income-Tax (I-T) Return within due time or show lesser income in their I-T Return. If this is the case with you then you will be able to file updated I-T Return soon. This is important to avoid getting a notice from the I-T Department and paying interest and penalties later on. For this, the Finance Act 2022 introduced the provision of filing Updated Return and the I-T Department has recently notified the form ITR-U to file the Updated Return for the financial year 2019-20 and onwards.

When can a taxpayer file an Updated Return?

The Updated Return can be filed in the following cases:
* If the taxpayer has filed the I-T Return under Section 139(1) and later discovered that he has not shown any income or has shown income lower than the correct amount.
* If the taxpayer has filed Belated Return under Section 139(4) and later discovered that he has not shown any income or has shown income lower than the correct amount.
* If the taxpayer has already filed the Revised Return under Section 139 (5) within the time provided under the Income Tax Act and later discovered that he has not shown any income or has shown income lower than the correct amount.
* The taxpayer has missed filing his I-T return.
Updated Return cannot be filed if there is no additional tax to be paid, an increase in tax refund / Loss or decrease in tax liability. It is also pertinent to note that the taxpayer can file ‘Only One Updated Return’ for an Assessment Year and it cannot be revised later.

Period allowed for filing Updated Return

The Updated Return can be filed only after the end of the Assessment Year and within 24 months thereafter. Therefore Updated Income Tax Return can be filed for the Assessment Year 2020-21 (Financial Year 2019-20) up to March 31, 2023. And the same cannot be filed if the I-T Department has already initiated or completed the assessment proceedings for a particular Assessment Year.

How to file Updated Return

You will be able to file the Form ITR-U by going on to the income tax portal The taxpayer has to select the reason for filing the ITR U i.e., (a) return previously not filed (b) income not reported correctly (c) wrong heads of income chosen (d) reduction of carried forward loss (e) reduction of unabsorbed depreciation (f) reduction of tax credit u/s. 115JB/115JC (g) wrong rate of tax (h) others etc. It is required to be filed either (a) electronically under digital signatures; or (b) under electronic verification code, as applicable. Unlike the other I-T Return forms, no detailed income breakup is required to be submitted.
Additional tax under Updated Return
The facility to file the Updated Return is not available for free and there is an Additional Tax Liability over and above the Regular I-T payable by the taxpayer under the normal provisions of the I-T Act. The amount of additional tax depends upon the time of filing of the updated return form:
* Updated Return Filed Up To Expiry Of 12 Months From End Of Assessment Year – In such case additional tax payable will be 25% of (regular tax + interest due).
* Updated Return Filed Between 12 Months To 24 Months From End Of Assessment Year – In such case additional tax payable will be 50% of (regular tax + interest due).

The ITR U is a facility the taxpayer must exercise after duly understanding the implications. For this, he can take the help of a Chartered Accountant or tax advisor to avoid any discrepancies in the Belated Return, as the same cannot be revised after filing. To avoid getting into any trouble with the I-T Department, it is always more prudent to file the I-T Return correctly and within the due time.

Disclaimer: The views expressed are for informational and educational purpose only. Anything contained herein does not constitute professional advice. Before taking any action related to your tax matters, it is always advisable to consult your tax advisor or Chartered Accountant. The author or the publication shall not be responsible for any loss suffered by any person directly or indirectly on the basis of this article.

Abhishek Aneja

Chattered Accountant

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