ITR U Return: Here’s a chance for you to file Income Tax Returns (ITR) if you missed the due date

• ByAmit k Sharma     |    January 23, 2023

Introduction

In India, the government introduced the concept of updated returns in the Union Budget 2022 to help taxpayers who did not file their Income Tax Returns (ITRs) by the deadline. ITR-U is a service provided by the government to such taxpayers under Section 139(8A).

The ITR-U form allows taxpayers to file their income tax returns as well as any additional information that was missed or omitted during the fiscal year. This form can be used to amend a previously filed return or to file a return for any fiscal year after the due date. 

The ITR-U return is filed in the same manner as any other ITR. The taxpayer must access the Income Tax Department’s official website and enter the necessary information. The taxpayer can file their ITR-U return once the details have been verified.

 The ITR-U return is a great service offered by the government to taxpayers who have failed to file their ITRs on time. This action by the government will assist taxpayers in remaining in compliance with tax laws and avoiding penalties or interest.

 ITR U/Updates Return as Per Income Tax Act & Rules

Sections 139 (8A), 140B, and 153(1A) of the Income Tax Act were enacted by Act No. 06 of 2022, effective 1-4-2022, and Rule 12AC of the Income-tax Rules, 1962 are relevant sections and rules for updated returns. 

A taxpayer may file an updated return of their own or another person’s income for which they are liable to pay tax under the Income Tax Act at any time within two years of the end of the assessment year. This right to file an updated return does not apply if the updated return is a loss return, reduces the total tax liability calculated by the original return, or results in a larger refund. 

A person is not eligible to file an updated return- ITR under these Sub-sections in these following circumstances:-

a) where a search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A in the case of such person;

(b) where a survey has been conducted under section 133A, other than sub-section (2A) of that section, in the case of such person; 

(c) where a notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person; 

(d) where a notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person,

for the assessment year relevant to the previous year in which such search is initiated, survey is conducted, or requisition is made, as well as any assessment year preceding such assessment year.

However, this is also not possible if

(a) an updated return has already been furnished, 

(b) any assessment or reassessment or recomputation or revision of income proceedings are pending or have been completed,

(c) information in respect of the person has been received under the smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976) or the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) or the Prevention of Money-laundering Act, 2002 (15 of 2003) or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) and the same has been communicated to him, prior to the date of furnishing of return, 

(d)  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, 

(e)  any prosecution proceedings under the Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of furnishing of return. 

(f) he is such person or belongs to such class of persons, as may be notified by the Board in this regard Additionally, a person who has sustained a loss and filed a return of loss within the prescribed time will be allowed to furnish an updated return of income.

Additionally, a person who has sustained a loss and filed a return of loss within the prescribed time will be allowed to furnish an updated return of income.

Addition Income Tax payable in ITR U:

The additional income-tax payable at the time of furnishing the return under sub-section (8A) of section 139 is 25% of the aggregate of tax and interest payable if the return is filed after the expiry of the time available under sub-section (4) or sub-section (5) of section 139 and before the end of the relevant assessment year, or 50% of the aggregate of tax and interest payable if the return is filed after the end of the relevant assessment year.

Benefits of ITR U

Filing ITR-U helps to avoid the annoyances of a scrutiny assessment under Section 143(3), best judgement assessment under Section 144, and income evasion assessment under Section 147. It also aids in the avoidance of survey, search, and seizure proceedings. 

If you missed the deadline for filing your income tax return for the Fiscal Year 2021-2022, which is December 31, 2022, you can still file your ITR using ITR U. This option, however, does not allow for refund claims, and you cannot file a nil return or a loss return through ITR U.

Conclusion

The government’s ITR-U return facility is a great step taken to help taxpayers who have failed to file their ITRs by the due date. It enables them to amend a previously filed return or file a return for any fiscal year after the due date with some additional income tax. The ITR-U return is filed in the same manner as any other ITR. This service is useful for taxpayers who want to stay in compliance with tax laws. The ITR-U return also assists taxpayers in avoiding any scrutiny, best judgement, or income evasion assessments.

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