ITR U: What is ITR-U & How to File Updated Return?

The Income Tax Department allows you to file an Updated Income Tax Return with the ITR-U form. During the Union Budget 2022, this concept was introduced by the government. This form enables you to rectify mistakes made in the returns you previously filed and ensure their accuracy. You can file this form within two years of filing the return of the relevant assessment year. 

The union government allows taxpayers to file updated returns under Section 139(8A) of the Income Tax Act, 1961. You can file an ITR-U online or offline in the following cases-

• If you did not disclose your income correctly

• If you chose the wrong head of income

• If you have paid taxes at an incorrect rate

• If you want to reduce the carried forward loss

• If you want to reduce the unabsorbed depreciation

• If you want to reduce tax credit under Sections 115JB and 115JC

• If you have not filed an ITR within the due date

• If you have missed filing a belated return

The Income Tax Department has provided this mechanism for specific taxpayers. You can file the ITR-U form if you have made an error in the following returns: 

• Original 

• Belated 

• Revised 

As per the income tax rules, you need to file updated returns along with the applicable Income Tax Return form. The ITR-U form consists of two parts: Part A and Part B.

You need to follow these simple steps when filling out Part A:

1. Enter your PAN number and name

2. Provide your Aadhaar card number and select the assessment year

3. Choose ‘Yes’ if you have previously filed the returns for the applicable assessment year

4. Enter the form number, acknowledgement number, or receipt number of the previously filed return

5. Provide the date of filing the original return in the ‘DD/MM/YY’ format

6. Select the appropriate option from the eligibility conditions 

7. Select the applicable ITR form number (1 to 7)

8. Choose at least one reason for updating the ITR 

9. Select the time frame of the previous ITR

10. If ITR-U reduces carried forward loss or unabsorbed loss, provide the affected assessment year due to updated return

 

Once you have completed this process, you will need to fill out Part B of the updated ITR form.

The second part conforms to computation of total updated income and tax payable. Follow these simple steps to complete this part of the form-

1. Provide additional income figures under each head of the income

2. Enter the income that you declared in the previous return

3. Provide the total income amount, which you can find in the ‘Part B – TI’ section of the previously filed return

4. Enter the amount payable and refundable (if any), which you can find in the relevant sections of Part B – TT of the form

5. Provide the amount of tax payable as per the last return 

6. If you claimed a refund in the last return, provide the claim amount

7. In case you received the refund, enter the amount of refund you received, including the interest amount

8. Enter the amount of fee you paid if you filed the previous return late

9. Provide the regular assessment tax you paid in the last return 

10. Enter the aggregate liability applicable to additional income

11. Enter additional tax liability on the updated income, which can either be 25% or 50%

12. Provide net tax amount payable by adding regular assessment tax and aggregate liability

13. If the updated ITR translates into tax payable amount, you need to pay it as a Self-assessment Tax  

14. Make the payment and enter the challan details

15. Verify your ITR-U form to complete the process

When filing updated returns, it is crucial to approach the process with accuracy. The following are some of the common mistakes you could avoid-

• Double-check for Errors

Before filing an ITR-U, review the form meticulously for any mistakes or omissions. This includes verifying income details, deductions claimed, and tax calculations.

• Ensure Eligibility

As everyone cannot file an ITR-U form, familiarise yourself with the eligibility criteria beforehand.

• Select Correct ITR Form

Ensure you select the same ITR form used for the original return when filing an updated return.

• Provide Accurate Reasons for Updating

This form requires you to specify the reason for updating your return. Provide the correct purpose of filing updated returns.

• File Updated ITR on Time

You can file this form within two years from the date of filing the original ITR. Ensure you file the updated return within the permissible timeframe.