Section 139 (8A) of Income Tax Act

You can file an updated return under Section 139(8A) of the Income Tax Act within 24 months from the end of the relevant assessment year.
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3 min
27-August-2024
Section 139(8A) of the Income Tax Act provides specific provisions regarding the filing of updated income tax returns. This section allows taxpayers to file an updated return if they have missed out on declaring certain income or if they need to rectify errors in their original return. The updated return can be filed within a prescribed period, even after the original due date has passed. This provision is crucial for ensuring that taxpayers can correct any mistakes and ensure that their tax filings accurately reflect their income.

This article will help you understand Section 139(8A) of the Income Tax Act, when you can file your income tax using this particular section and also how you can and cannot file an updated return under this section of the income tax.

Section 139(8A) allows taxpayers to update their returns, ensuring accurate reporting of income across different income tax slabs.

What is section 139(8A)?

Section 139(8A) of the Income Tax Act, 1961, is a provision that allows taxpayers to file an updated return if they have missed declaring certain income or need to correct errors in their original tax return. This section facilitates the filing of Form ITR-U, which is specifically designed for updated income tax returns. The provision enables individuals and entities to amend their returns beyond the initial deadlines provided under sections 139(1) for regular returns, 139(4) for belated returns, and 139(5) for revised returns. It is a crucial tool for ensuring that taxpayers can correct discrepancies and ensure accurate reporting of income and taxes.

When can you file an updated return under section 139(8A)?

Under Section 139(8A), taxpayers have the opportunity to file an updated return under the following circumstances:

  • Eligibility for filing: Taxpayers can file an updated return regardless of whether they initially filed their return under section 139(1), submitted a belated return under section 139(4), or a revised return under section 139(5). This includes all types of taxpayers, including individuals, Hindu Undivided Families (HUFs), firms, Limited Liability Partnerships (LLPs), companies, and associations of persons (AOPs).
  • Conditions for filing: The updated return can be filed only if the tax liability is settled within the extended period of 24 months from the end of the relevant assessment year. This means that the updated return should include proof of tax payment as instructed under section 140B.
  • Limitations: Once filed, updated returns cannot be revised further. Therefore, Section 139(8A) permits only one opportunity to file an updated return for each assessment year.

Updated returns cannot be filed under section 139(8A) in some cases

There are specific scenarios where filing an updated return under Section 139(8A) is not permitted:

  • Loss returns: Updated returns cannot be filed if the return is showing a loss.
  • Tax liability adjustments: If the updated return results in reducing the tax liability or increasing the refund, it cannot be filed under this section.
  • Pending or completed assessments: If an assessment is already pending or has been completed, updated returns under Section 139(8A) cannot be filed.
  • Prescribed acts: If the Assessing Officer has details about the taxpayer under any prescribed acts, the updated return cannot be filed.
  • Surveys and inspections: Updated returns cannot be filed if any survey has been conducted under section 133A of the Income Tax Act.

Prescribed time for updated returns as per section 139(8A)

The timeframe for filing updated returns under Section 139(8A) is set as follows:

1. Time limit: Taxpayers have 24 months from the end of the relevant assessment year to file an updated return. This extended period allows taxpayers to correct their returns well beyond the original due date.

2. Examples of due dates:

  • For Assessment Year (AY) 2020-21 (Financial Year (FY) 2019-20), the last date to file an updated return is 31st March 2023.
  • For AY 2021-22 (FY 2020-21), the last date to file an updated return is 31st March 2024.
  • For AY 2022-23 (FY 2021-22), the due date to file an updated return is 31st March 2025.

Additional tax/penalty for filing updated returns under section 139(8A)

When filing updated returns under Section 139(8A), taxpayers must account for additional taxes and penalties. If an updated return is filed within one year from the end of the relevant assessment year, a penalty of 25% of the average tax and interest payable is applied. If the updated return is filed between one and two years from the end of the assessment year, the penalty increases to 50% of the average tax and interest payable. This penalty structure incentivizes timely correction of returns and ensures compliance with tax regulations.

Required details to be filed in form ITR-U

Form ITR-U is designed for filing updated returns under Section 139(8A). Essential details to include in Form ITR-U are:

  • Eligibility confirmation: Verify eligibility to file updated returns as per Section 139(8A).
  • ITR form selection: Choose the appropriate ITR form (ITR-1, 2, 3, 4, 5, 6) for the updated return.
  • Update reasons: Indicate reasons for updating the return, such as unreported income, incorrect tax rates, or prior return issues.
  • Filing period: Specify the period during which the updated return is being filed, ensuring compliance with the one-year or two-year timeframe from the end of the assessment year.
Explore these essential articles on income tax for comprehensive insights

Calculate total payable tax for updated returns

To determine the total payable tax for updated returns, follow these steps:

  • Tax payable: Calculate the tax on additional income as per the adjusted ITR.
  • Interest: Add any interest levied on additional income under Sections 234A, 234B, and 234C.
  • Late fee: Include any late fees under Section 234F.
  • Taxes paid: Deduct taxes already paid, including TCS, TDS, advance tax, or regular assessment tax.
  • Refund claimed: Subtract any total refunds issued as per the original return.
  • Additional tax: Add the additional tax at 25% to 50% based on the filing timeline.
  • Total amount payable: Sum all these components to get the total amount payable.

Penalty / Additional tax payable

Penalty structure:

  • 25%: For updated returns filed within one year from the end of the assessment year.
  • 50%: For updated returns filed between one and two years from the end of the assessment year.
Additional tax: Calculated as a percentage of the average tax and interest payable, as specified.

Conclusion

Section 139(8A) provides a valuable opportunity for taxpayers to correct and update their returns, ensuring accurate tax reporting. While this provision offers a chance to amend previous errors, it is accompanied by penalties for late submissions. By understanding the requirements and deadlines associated with Form ITR-U, and calculating the total payable tax accurately, taxpayers can comply with tax regulations and avoid additional costs. This process is crucial for maintaining tax integrity and ensuring that all income is reported correctly.

Section 139(8A) provides a valuable opportunity for taxpayers to correct errors in their returns. Similarly, investors can leverage platforms like the Bajaj Finserv Mutual Fund Platform to manage their investments effectively. With over 1000+ mutual fund schemes listed on the Bajaj Finserv Platform, users have access to a wide range of investment options, making it easier to align their financial strategies with updated tax regulations with options like comparing and calculating mutual funds on the go. The Bajaj Finserv Platform simplifies investment management and ensures that your portfolio can adapt to any financial adjustments you need to make, just as Section 139(8A) helps rectify any tax filing errors.

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Frequently asked questions

What is Section 139(8A) of the Income Tax Act?
Section 139(8A) allows taxpayers to file an updated income tax return if they have missed declaring certain income or need to correct errors in their original return. This provision provides a mechanism to rectify mistakes beyond the original due date.

Who needs to comply with Section 139(8A)?
All taxpayers, including individuals, firms, HUFs, and companies, must comply with Section 139(8A) if they wish to amend their previously filed returns. This includes those who need to correct errors or update omitted income.

What is the due date for filing under Section 139(8A)?
The due date for filing under Section 139(8A) is within 24 months from the end of the relevant assessment year. For example, for AY 2021-22, the last date is March 31, 2024.

What happens if an entity fails to file under Section 139(8A)?
If an entity fails to file under Section 139(8A), they forfeit the opportunity to correct errors or update their return for the relevant assessment year. Penalties may also apply if the return is not updated.

Is audit mandatory under Section 139(8A)?
An audit is not mandatory under Section 139(8A) unless the original return required one. However, updated returns must be verified, either through a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).

Are there any specific forms for filing under Section 139(8A)?
Yes, Form ITR-U is specifically used for filing updated returns under Section 139(8A). Taxpayers must select the appropriate ITR form and provide reasons for the updates when filing this form.

What documents are required to be submitted along with the return under Section 139(8A)?
Documents required include proof of tax payments (under Section 140B), details of additional income, and any relevant supporting documents to substantiate the updates or corrections made in the return.

Can entities revise their return filed under Section 139(8A)?
No, updated returns filed under Section 139(8A) cannot be revised again. Once submitted, they are final for that assessment year, and further corrections or revisions are not permitted.

Are there any exemptions under Section 139(8A)?
Yes, exemptions include cases where the updated return results in a loss, reduces tax liability, or if assessments are pending or completed. Returns cannot be updated if a survey under section 133A has been conducted.

How does Section 139(8A) impact international transactions?
Section 139(8A) primarily affects domestic tax filings. However, if international transactions are involved, any errors or omissions related to them must be corrected within the updated return, ensuring compliance with international tax regulations.

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