ITR U filing last date for A.Y.2021-22 is 31st March 2024

[Sparsh wadhwa]

What is ITR U?

ITR-U is the Form that allows you to update your income tax return by rectifying errors or omissions for up to two years from the end of the relevant assessment year. The government introduced the concept of updated returns in the Union Budget 2022.

Section 139(8A) under the Income Tax Act allows you a chance to update your ITR within two years. Two years will be calculated from the end of the year in which the original return was filed. ITR-U was introduced to optimize tax compliance by taxpayers without provoking legal action.

ITR-U Filing Deadline

For the assessment year 2021-22, taxpayers have until 31 March 2024 to file an updated return using ITR-U if they have if they have omitted or incorrectly reported income.

Who is eligible to file ITR-U?

Any taxpayer is eligible to file ITR-U under Section 139 (8A) who have furnished or not furnished an original, revised, or belated return. An Updated Return can be filed in the following cases:

Omission or Error Correction: Intended for addressing any omission, error, or incorrect statement in the earlier filed return of income.

Not Filed Previously: Allows filing for those who have not submitted a return previously.

Income Reporting Correction: Permits correction if income was not reported accurately in the earlier return.

Heads of Income Correction: Provides the option to rectify the selection of wrong heads of income.

Loss Adjustment: Facilitates the reduction of carried forward loss.

Depreciation Adjustment: Allows for the reduction of unabsorbed depreciation.

Tax Credit Adjustment: Permits the correction or reduction of tax credits under Section 115JB/115JC.

Correcting Tax Rate: Enables adjustment if the wrong rate of tax was applied in the initial filing.

Additional Tax

Additional Tax Calculation (First Period): If filed within the initial 12-month period, the taxpayer incurs 25% of the further tax amount plus interest i.e., For AY 2021-22 if updated between April 1, 2022, and March 31, 2023.

Increased Additional Tax (Second Period): If filed within the extended 24-month period, the additional tax increases to 50% of the further tax amount plus interest i.e., For AY 2021-22 if the updated return is submitted between April 1, 2023, and March 31, 2024.

How to file ITR U form?

In Part-A, the individual is required to fill in his general information. 

• In A1, he is required to fill in his PAN, i.e., permanent account number. 
• In A2, he should fill his name.
• In A3, he is required to fill in his Aadhaar Card Number.
• In A4, he should enter the assessment year.
• In A5, he is required to select yes, if he has filed the return earlier or No if he hasn’t filed it for the assessment year.
• In A6, select yes at the acknowledgement of ITR if it was filed under section 139(1) of the Income Tax Act.
• In A7, he should enter form number, along with the acknowledgement and receipt number, and the date of filing of the previous or original return. The assessee may find all these details in the acknowledgement of ITR.
• In A8, he may check the eligibility terms and conditions and select the most suitable option.
• In A9, he should select the ITR form number.
• In A10, the user must select at least one reason for updating the ITR. However, he may select more than one reason, or multiple reasons are allowed to choose.
• In A11, he should select the '12-24 months’, option if 12 months or one year has passed. Otherwise, he should section the 'up to 12 months' option if more than one year is left.
• In A12, he should enter yes if he is filing the updated return to reduce the carried forward loss or tax credit or unabsorbed depreciation. Further, he is also required to enter the assessment year in which the loss or depreciation was affected due to the ITR U or updated returns.
• In Part B, The individual is required to fill Updated income and calculating liability
• Mention the head of income under which you are reporting the additional income in the updated return.
• Provide the total income as per the last valid return, only if you have filed a return previously.
• Calculate the total income as per Part B-TI of the updated return.
• Determine the amount payable or refundable based on the updated return.
• Consider any amount payable or refund claimed in the last valid return.
• Account for any fee for default in furnishing the return of income under section 234F.
• Include the regular assessment tax, if applicable.
• Calculate the aggregate liability on additional income.
• Determine the additional income-tax liability on the updated income based on prescribed rates.
• Calculate the net amount payable or refundable.
• Report any tax paid under section 140B.
• Determine the tax due by subtracting the tax paid from the net amount payable.
• Provide details of tax payments made under section 140B and payments of Advance Tax/Self-Assessment Tax/Regular Assessment Tax not claimed in the earlier return.

Conclusion

Filing an updated return using ITR-U is a crucial step in rectifying errors, updating income details, and ensuring accurate tax filings. It provides taxpayers with the opportunity to correct mistakes made in the original return and comply with tax laws effectively. By understanding the concept of ITR-U and following the guidelines provided, taxpayers can navigate the process smoothly and avoid penalties or legal consequences.

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