Introduction
The Central Board of Indirect Taxes (CBDT) has notified the Form ITR U which is filed by any person who is eligible to file such a return under the sub-section (8A) of section 139. This updation has been made as it is believed that it will result in additional revenue realization and also will facilitate ease of compliance to the taxpayer in a litigation-free environment. The ITR U is a form that can be filled by the persons who unintentionally forgot to provide some record of income or submitted the wrong information in the ITR.
ITR U form filing will allow the elimination of discrepancies or omissions on the part of taxpayers. It is a form applicable to file the updated income tax returns for financial year 2019-20 and 2020-21. While filing form ITR U, a taxpayer must keep in mind to provide a genuine reason for updating the ITR.
After preparing the ITR it is to be uploaded in XML/JSON format by logging into Income Tax Website. You may contact EAdvisors to file your ITR U as we are always there for our clients.
E-filing of Updated ITR u/s 139 (8A) has been introduced for AY 2020-21 and AY 2021-222 using Excel Utility for ITR 1 and 4.
What is ITR U?
It is an updated Income Tax Return that may be filed within two years following the conclusion of the applicable assessment year. For all those who forgot to mention any record of income in the previously filed income tax return then, updated ITR can be filed on the Income Tax E-Filing Portal. Also, the updated Income Tax Return is a return that allows a taxpayer to correct errors or omissions on their ITR by paying additional taxes along with it.
When ITR U can be filed?
Here are the situations mentioned where one can file the updated ITR known as ITR U.
- Where the return is not previously filed by the taxpayer
- Where the income of the taxpayer was not reported correctly
- Where the wrong heads of income were chosen while filing ITR
- Reduction of carried forward of loss
- Reduction of unabsorbed depreciation
- Reduction of tax credit u/s 115JB / 115JC
- Where the tax rate was wrongly taken
When ITR U cannot be filed?
Here are the following cases where updated return i.e. ITR U would not be filed as stated under the Finance Bill, 2022:-
- Where there is a return of loss
- Decrease in the total tax liability on the basis of return furnished
- If it results in a refund or increases the refund due on the basis of the return furnished
- If an updated return is furnished under this subsection for the relevant assessment year
- Any proceeding for assessment or reassessment or revision of income under this Act is pending or has been completed for the relevant assessment year in his case
- The Assessing Officer has information in respect of similar person for the applicable assessment time in his possession under the Bootleggers and Foreign Exchange Manipulator ( Forfeiture of Property) Act, 1976 or the Prohibition of Benami Property Deals Act, 1988 or the Prevention of plutocrat- laundering Act, 2002 or the Black plutocrat( Undisclosed Foreign Income and means) and duty of Tax Act, 2015 and the same has been communicated to him, previous to the date of furnishing of return
- If information for the relevant assessment year has been received under an agreement referred to in section 90 or section 90A in respect of such person and the same has been communicated to him, prior to the date of furnishing of return under this sub-section.
- In case of any prosecution lawsuits beneath the Chapter XXII have been initiated for the applicable evaluation 12 months in admire of such person, prior to the date of furnishing of return below this sub-section.
- If he is such individual or belongs to such category of persons, as can also be notified through the Board in this regard.
Non-Compliance
There will be an extra tax of 25% to 50% on the tax and interest owed on the greater income. According to the PTI copy, if the up to date ITR is submitted within 12 months, a greater 25% of the outstanding tax and interest ought to be paid; if submitted after 12 months however earlier than 24 months from the conclusion of the relevant Assessment Year, the price will increase to 50%. Taxpayers cannot, however, take benefit of up to date return advantages in that unique year if a prosecution manner is beginning via submitting a notification for a sure Assessment Year.
Additionally, a taxpayer’s return would be regarded invalid if they file a revised return however fail to pay the extra taxes.
