Filing Revised/ Belated Return vs ITR-U: Know more about ITR-U
The concept of ITR-U, or Updated Income Tax Return, was introduced to give taxpayers the opportunity to amend or update their previously filed income tax returns. This provision ensures greater tax compliance and transparency by allowing taxpayers to rectify errors or omissions or file returns they missed entirely. Here’s an in-depth overview of ITR-U, including its eligibility, conditions, time limits, and filing process.
What is ITR-U?
ITR-U is a form through which taxpayers can:
1. Rectify errors or omissions in previously submitted returns.
2. File returns for an assessment year if they have missed the original or belated filing deadlines.
The taxpayer has a two-year window from the end of the relevant assessment year to file an ITR-U. For example, if an individual failed to file or amend his ITR for AY 2024–25, he can file an ITR-U after December 31, 2024, but no later than March 31, 2027. ITR-U Filing for AY 2024–25 started on January 1, 2025.
Please note that the due date for filing a Revised/ Belated Return in case of an individual for FY 2023-24 /AY 2024-25 was extended to January 15, 2025.
This provision, under Section 139(8A) of the Income Tax Act, enables taxpayers to achieve compliance without the sharp terminations of legal consequences.
Who can file ITR-U?
Only those who have committed errors in their: Original returns Belated returns Revised returns Taxpayers can apply ITR-U for the following reasons:
- Failure to file a return prior to or during the extended date of filing.
- Declaring income inaccurately.
- Income under the wrong head.
- Tax paid at wrong rate.
- Carry-forward losses being reduced.
- Unabsorbed depreciation being reduced.
- Adjusting tax credit under Sections 115JB/115JC.
Only one updated return is allowed by every taxpayer in respect of a particular assessment year. You cannot revise ITR-U if you make any mistake in it’s filing.
Who cannot file ITR-U?
Some individuals cannot file ITR-U:
1. A taxpayer has filed an updated return for the same AY earlier.
2. Taxpayers seeking to file a nil return or seek losses.
3. Those in which the reassessed return gives rise to a refund claim or reduces the liability for tax.
4. When search operations under Section 132 have been undertaken by the taxing authorities.
5. In cases where books, documents or other assets are seized under Section 132A.
6. In case assessments or re-assessments or re-computations are pending or already made.
7. In case there is no further tax liability (i.e., completely through TDS or losses).
ITR-U Filing Deadline
The last date for ITR-U filing is 24 months from the end of the relevant assessment year. For AY 2022–23, the deadline will be 31st March, 2025, while for AY 2024–25, the deadline will be 31st March, 2027.
Additional Tax Liability for ITR-U
For preparing the ITR-U, the taxpayers need to pay an addition tax which is a percentage of tax payable.
- If the return is filed within 12 months from the end of relevant AY, then the charge will be 25% additional tax.
- If the return is filed after 12 months but before 24 months, then the charge will be 50% additional tax.
Filing ITR-U: Step-by-Step Process
While filing ITR-U, the taxpayer has to furnish it along with the updated version of the applicable ITR form, namely ITR 1–7.
Part A: General Information
1. PAN and name.
2. Aadhaar number.
3. Assessment year details.
4. Specify if a return was filed previously for the relevant year.
5. Give details of the earlier filing, including form number, acknowledgment/receipt number, and date.
6. Choose the relevant eligibility condition for updating the ITR.
7. Choose the ITR form number.
8. Give reasons for updating the return (multiple options allowed).
9. Indicate whether the return is being filed within 12 months or between 12–24 months.
10. If the updated return affects carried-forward losses, unabsorbed depreciation, or tax credits, specify the impacted year and any prior updated filings.
Part B: ATI (Computation of Updated Income and Tax Payable)
1. Declare additional income figures.
2. State the income as per the previous return.
3. Compute the total updated income and tax liability.
4. Provide details of any refund claimed in earlier returns.
5. Provide details of late filing fees or regular assessment tax paid in the previous return. .
6. Compute additional tax liability (25% or 50%).
7. Provide details of self-assessment tax paid under Section 140B along with challan details. .
Verification of ITR-U
Taxpayers can verify the updated return through:
- Aadhaar OTP
- Electronic Verification Code (EVC)
- Digital Signature Certificate (DSC)
ITR-U allows taxpayers to fill the gaps of compliance without facing serious legal consequences. On the other hand, it carries clear eligibility criteria and involves additional tax liability that needs to be paid. Deadlines must be followed and return verified for seamless completion of the process. Therefore, knowledge of ITR-U and its utilization can assist the individual or organization in effectively being compliant with the tax laws.
