ITR U Form

What is ITR-U?

ITR-U refers to the Updated Income Tax Return introduced under Section 139(8A) of the Income Tax Act. It allows taxpayers to voluntarily update their income tax return by disclosing previously missed or under-reported income. This return can be filed within a specific time frame even after the original or belated return has been filed.

The purpose of ITR-U is to provide an opportunity for honest taxpayers to rectify errors or omissions without waiting for notices from the Income Tax Department. It helps improve voluntary compliance and reduces the burden of litigation. This facility is beneficial for those who missed filing a return or reported incorrect income earlier. However, filing ITR-U involves paying additional tax and must be completed within the prescribed time limits. The updated return must be filed using Form ITR-U in combination with the applicable ITR form for the relevant year.

Who can file ITR-U under Section 139(8A)?

Any taxpayer, whether an individual, HUF, firm, company, or other entity, can file an updated return using ITR-U under Section 139(8A) if they have previously failed to file a return or wish to correct omissions or errors in a return already filed. It applies to income underreported, income not reported at all, or incorrect heads of income.

This provision allows for an updated return to be filed within twenty-four months from the end of the relevant assessment year. It serves as a second chance to report additional income and comply with tax obligations voluntarily. The taxpayer is also required to pay any additional tax, interest, and a mandatory additional amount before filing ITR-U. The facility is available irrespective of whether the original return was filed or not, provided specific disqualification conditions do not apply.

Who is not eligible to file ITR-U u/s 139(8A)?

ITR-U cannot be filed by taxpayers in certain circumstances. Those facing scrutiny, reassessment, or search and seizure proceedings under the Income Tax Act are not eligible. If the income being disclosed in ITR-U leads to a reduction in tax liability, an increase in refund, or claim of loss adjustment, the form cannot be used.

Additionally, taxpayers cannot file ITR-U if prosecution proceedings are initiated or if the updated return relates to assessment years where the tax department already has information under specified reporting agreements. The provision is designed for voluntary compliance, not for situations involving tax evasion or under investigation. It’s essential to understand these restrictions before attempting to file ITR-U to avoid rejection or penalties.

What is the time limit to file ITR-U?

The ITR-U can be filed within twenty-four months from the end of the relevant assessment year. This extended time frame is provided to allow taxpayers enough opportunity to update their income details and meet their tax obligations even after missing the regular return deadlines.

For instance, for Assessment Year 2022–23 (Financial Year 2021–22), the last date to file ITR-U would be 31st March 2025. However, taxpayers must remember that the longer the delay, the higher the additional tax payable. Filing ITR-U after the end of the normal or belated filing window ensures compliance but comes at a financial cost due to the inclusion of interest and penalty. Timely filing of an updated return also helps avoid prosecution and enhances the taxpayer’s compliance record.

Should you pay additional tax when filing ITR-U?

Yes, taxpayers are required to pay additional tax while filing ITR-U under Section 139(8A). If the updated return is filed within twelve months from the end of the relevant assessment year, the additional tax is 25% of the total tax and interest due. If filed between twelve and twenty-four months, the additional tax increases to 50%.

This is in addition to the regular tax and interest payable on the updated income. The purpose of this penalty is to encourage timely and accurate reporting of income. The entire amount must be paid before filing the ITR-U, and proof of payment should be submitted. Without paying the full amount, the return will not be considered valid. Therefore, it’s crucial to compute the liability accurately and settle dues before proceeding with the submission.

How to file Form ITR-U?

To file Form ITR-U, the taxpayer must first log into the Income Tax Department’s e-filing portal. ITR-U is not a standalone form and must be filed in conjunction with the respective ITR form applicable for that assessment year. Select ‘File Updated Return’ under Section 139(8A) and choose the relevant assessment year.

Download the applicable utility (offline or online), fill in the updated income details, and calculate tax, interest, and additional tax. Complete and validate both forms and generate the JSON file. Upload the file on the portal and verify it using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC). After successful filing, download the acknowledgment (ITR-V) for your records. Ensure all amounts are paid before uploading the form to avoid rejection.

How to verify ITR-U?

ITR-U must be verified electronically after submission to be considered valid. The most common method is by using a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC). EVC can be generated via net banking, Aadhaar OTP, or through your pre-validated bank account or demat account on the e-filing portal.

After completing the ITR-U and uploading it successfully, select the preferred verification method. If using DSC, it must be registered and active. For EVC, ensure the mobile number linked to Aadhaar is active to receive the OTP. Once verification is complete, an acknowledgment (ITR-V) is issued. If the form remains unverified, the Income Tax Department will not process it, and it will be treated as invalid. Verifying ITR-U on time ensures proper completion of the return process.

How to compute the tax payable for an updated return (ITR-U)?

To compute tax for ITR-U, start by determining the total additional income that was either under-reported or omitted in earlier filings. Calculate the applicable tax based on the correct slab rates or business rates for the relevant year. Add applicable interest under sections 234A, 234B, and 234C for delays or shortfalls.

Next, compute the mandatory additional tax: 25% of the tax and interest if filed within 12 months, or 50% if filed after 12 but before 24 months. Include any surcharge or cess, as applicable. Deduct any TDS or advance tax already paid for the period. The final figure is the amount payable before submitting the return. Ensure that all taxes and additional charges are paid and reflected in the return, as non-payment renders the filing invalid.

Conclusion

ITR-U is a progressive step introduced to encourage voluntary compliance and reduce tax disputes. It allows taxpayers to update previously unfiled or incorrectly filed returns within 24 months, by paying applicable taxes and penalties. It promotes transparency and gives taxpayers a second chance to correct errors without fear of prosecution.

However, ITR-U comes with strict eligibility conditions and additional tax liabilities. Understanding who can file, how to compute the dues, and the correct filing procedure is essential to avoid rejection or penalties. By using ITR-U wisely and within deadlines, taxpayers can improve their compliance record and avoid unnecessary scrutiny from tax authorities.