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

Making errors on your Income Tax Returns (ITRs) is a common experience. Whether it is missing the filing deadline or overlooking income or deductions, many taxpayers find themselves wishing they could make corrections. If this sounds familiar, you’re not alone. These oversights can lead to unnecessary tax payments or missed refunds. Thankfully, there’s a solution: the government’s introduction of updated returns (ITR U) in the Union Budget 2022 that offers a simple way to rectify these mistakes without any legal complexities.

What is ITR U or Updated Return?

The Income Tax Return-Updated (ITR U) form allows taxpayers to amend previously filed returns (original, past, or revised) by declaring additional income or rectifying errors. Introduced to improve tax compliance and avoid legal repercussions, ITR U also aids the government in recovering revenue from previously undisclosed or under-reported earnings.

ITR U can be filed within 24 months (Budget 2025 has proposed to extend this time limit to 48 months) of the relevant assessment year’s end. The form is split into two sections: Part A and Part B.

Part A collects general information, like your PAN, name, Aadhaar number, and the relevant assessment year. You’ll also need to specify if a return was previously filed for that year, providing the section under which it was filed, along with the acknowledgment number and date.

Part B is where you complete the updated return using the same ITR form chosen in Part A. This involves reporting income from various sources and claiming applicable deductions (e.g., under section 80C , section 80D, section 80G). If your total income exceeds ₹50 lakhs, you must also declare your assets and liabilities.

Who is Eligible to File the ITR U Form Under Section 139(8A)?

You’re eligible to file an updated return under ITR U section 139 (8A) if you’ve made an error or omitted income details in your original, belated, or revised income tax return. Specifically, ITR U can be used if you:

• Didn’t file a return at all
• Missed both the original and belated return deadlines
• Declared income inaccurately
• Paid tax at the wrong rate or under the wrong income head
• Need to reduce tax credit under section 115JB/115JC
• Need to decrease carried forward losses or unabsorbed depreciation

It’s important to note that you can only file one updated return per assessment year.

Who is Not Eligible to File the ITR U Form Under Section 139(8A)?

As per Section 139 8A of Income Tax Act, you cannot file an ITR U in the following situations:

• To file a nil or loss return
• To claim or increase a refund
• If you’ve already filed an updated return for that assessment year
• If the updated return would result in a lower tax liability
• If search proceedings under section 132 have been initiated against you
• If a survey under section 133A has been conducted
• If assets, books, or documents have been requisitioned or seized by tax authorities under section 132A
• If assessment, reassessment, revision, or re-computation proceedings are pending or completed
• If no additional tax is due (i.e., your tax liability is offset by TDS credits or losses, and you have no other outstanding tax obligations)

Download Form ITR U

The ITR U form can be easily filled out by downloading it from the Income Tax Department’s official website.

What is the Time Limit to File ITR U?

It is important to know the time limit if you want to apply for an income tax return update. You have up to 24 months after the end of the relevant assessment year to file an ITR U. For example, the deadline to file an ITR U for the 2022-23 assessment year is 31st March 2025, while the deadline for the 2024-25 assessment year is 31st March 2027.

How to File Form ITR U?

To file an updated return income tax, you will need to submit it along with an updated version of the corresponding ITR form (ITR 1-7). Follow these steps to complete Form ITR U:

1. Part A (Personal Information): Provide your PAN, name, address, email, mobile number, and date of birth.

2. Aadhaar Linking: Enter your Aadhaar number and ensure it’s linked to your PAN.

3. Part B (Status): Specify your status (individual, HUF, firm, company) and residential status (resident/non-resident).

4. Part C (Original/Belated/Revised Return Details): Select the original/belated/revised ITR form number (ITR 1-7) and provide its acknowledgment number and date.

5. Part D (Reason for Filing Updated Return): Choose the reason for filing the ITR U from the available options.

6. Income Details: Detail any additional income under each relevant income head (a detailed breakdown is optional).

7. Part E (Computation of Income and Tax Liability): Compare the income declared in the original/belated/revised return with the updated income. State the total income (found in ‘Part B-TI’ of your original ITR form). Calculate the tax payable for both the original and updated returns; the difference is the additional tax due.

8. Part F (Details of Taxes Paid): Provide details of Tax Deducted at Source (TDS) , TCS, advance tax, and self-assessment tax already paid.

9. Part G (Bank Account Details): Provide details of your bank accounts held at any point during the previous year.

10. Part H (Verification): Verify and sign the declaration.

11. Submission: Attach the updated ITR form (1-7) to the ITR U and submit both online via the Income Tax portal.

How to Verify ITR U?

You can verify your ITR U using one of the following methods:

• Aadhaar OTP
• Electronic Verification Code (EVC)
• Digital Signature Certificate (DSC)

If your return is subject to a tax audit, verification must be done using a Digital Signature Certificate (DSC).

Additional Tax Payment When Filing ITR U

Filing an ITR U incurs an additional tax on top of the existing tax and interest owed. The percentage depends on when you file:

• Within 12 months of the relevant assessment year’s end: 25% additional tax (on the tax and interest amount).
• Within 24 months of the relevant assessment year’s end: 50% additional tax (on the tax and interest amount).

How to Calculate the Tax Payable for an Updated Return (ITR U)?

When filing an updated return (ITR U), the total tax payable comprises several components: the original tax due, any applicable interest, late filing fees for the initial delay, and an additional tax levied specifically for filing the ITR U (either 25% or 50% of the tax and interest). This can be calculated as:

ITR U Total = Tax Due + Interest + Late Filing Fees + Additional Tax

To determine your net tax liability after accounting for payments already made, subtract any TDS, TCS, advance tax, or tax relief from the total ITR U amount calculated above:

Net Tax Liability = Total ITR U Amount – (TDS + TCS + Advance Tax + Tax Relief)

Key Points About ITR U: Updated Return

There are some key points that you should know about ITR U:

• The ITR U serves the purpose of allowing taxpayers to correct past tax returns by declaring previously omitted income or claiming missed deductions.
• You can file an ITR U for up to two assessment years prior to the end of the relevant assessment year. For instance, the deadline to file an ITR U for the 2022-23 assessment year is 31st March 2025.
• Only one ITR U can be filed per assessment year. Once submitted, no further revisions are permitted under this provision.
• The ITR U can be used to correct errors related to income, tax credits, and deductions. However, it cannot be used to claim or increase a tax refund.
• Any additional tax and interest owed must be paid before submitting the ITR U to ensure accuracy and avoid discrepancies.
• Critically, the ITR U cannot be used to claim refunds. Its sole purpose is to report additional income and rectify filing mistakes.

Cases When an Updated Return of Income Cannot be Furnished

An updated income tax return (ITR U) cannot be filed in the following circumstances:

• If prosecution proceedings have been initiated under the Income-tax Act.
• If a search has been initiated under Section 132 or a requisition made under Section 132A of the Income-tax Act.
• If a survey has been conducted under Section 133A (excluding surveys under Section 133(2A)).
• If any assessment, reassessment, recomputation, or revision proceedings are pending under the Income-tax Act.
• If the Assessing Officer possesses information regarding the relevant assessment year related to issues such as black money or benami transactions.
• If the information has been received under agreements referred to in Sections 90 or 90A of the Income-tax Act (relating to double taxation avoidance agreements).

Conclusion

The ITR U allows taxpayers to voluntarily correct and update their tax returns for up to two years following the end of the relevant assessment year. This helps ensure compliance and avoid potential legal issues. However, filing an ITR U involves paying an additional tax of 25% or 50% (plus interest) on the increased tax liability. Therefore, it’s crucial to carefully consider all factors and implications before filing it.

FAQs on ITR U