ITR U cannot be filed in specific situations. Taxpayers undergoing scrutiny, reassessment, or involved in search and seizure cases under the Income Tax Act are not eligible. Additionally, if filing ITR U results in reduced tax liability, increased refund, or loss adjustment, then it cannot be used. ITR U is strictly for correcting omissions or underreporting.
Earlier updated return filed: When you’ve already filed an updated return for that assessment year.
Nil or loss return: If you are filing a return showing no income or reporting a loss.
Refund or higher refund claims: To claim a refund or to increase the refund amount you’re eligible for.
Lower tax payable: If filing the updated return will reduce your overall tax liability.
Ongoing tax investigations: When a search (under Section 132) or survey (under Section 133A) has been carried out against you.
Seized records or assets: If the Income Tax Department has seized your books, documents, or assets under Section 132A.
Tax proceedings pending or completed: When assessment, reassessment, revision, or re-computation processes are still in progress or already completed.
No extra tax to pay: If after adjusting TDS, losses, and other credits, there is no additional tax due.
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?
ITR-U must be filed within 48 months from the assessment year end—AY 2024-25 deadline is 31st March 2029.
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.
Part A: General Information
A1: Enter PAN.
A2: Enter your full name.
A3: Enter Aadhaar number.
A4: Mention the relevant Assessment Year.
A5: Select ‘Yes’ if return was filed earlier for this AY.
A6: Refer to ITR acknowledgement to identify filing section (e.g., 139(1), etc.).
A7: Fill in original form number, acknowledgement/receipt number, and filing date.
A8: Confirm eligibility to file ITR-U based on mentioned restrictions.
A9: Select the ITR form type used previously (ITR-1 to ITR-7).
A10: Choose reason(s) for updating return (multiple options allowed).
A11: Select the appropriate time bracket (12-48 months).
A12: If carry-forward loss or depreciation is affected, mention the AY and if a revised/updated return was filed earlier.
Part B: ATI - Computation of Total Updated Income & Tax
Report additional income under respective heads (no detailed break-up needed).
Mention income from the last filed return.
State total income (refer to Part B-TI of ITR).
Report tax payable (from Part B-TT).
Mention refund, if claimed or received earlier (include interest).
State late filing fees paid earlier.
Mention regular assessment tax from the last return.
Calculate aggregate liability on updated income.
Compute additional tax: 25%/50% of (updated liability – previous tax).
Net tax payable = previous + additional tax.
If tax is due, pay it as Self-Assessment Tax under Section 140B and provide challan details.
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)?
When you file an updated return (ITR-U), your total tax liability includes the original tax you owe, interest for the delay, late filing fees, and an extra penalty of either 25% or 50% of the tax amount, depending on the rules that apply.
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.
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.
Belated, Revised Income Tax Returns vs ITR U - know the difference & details
Belated Return: Can be filed after the due date (e.g., 31st July) till 31st December of the relevant AY, with a penalty.
Revised Return: Filed to correct errors in original or belated returns, allowed till 31st December of the relevant AY.
ITR-U (Updated Return): Enables corrections in previously filed ITRs within 4 years but disallows refund claims or loss carry forwards.
ITR Type
|
Deadline
|
Penalty/Charges
|
Belated ITR
|
31st December of relevant AY
|
₹1,000 (Income ≤ ₹5L), ₹5,000 (Income > ₹5L)
|
Revised ITR
|
31st December of relevant AY
|
No Penalty
|
ITR-U (Updated)
|
Within 4 years from end of relevant AY
|
Additional Tax:• 12 months: 25% tax + interest• 24 months: 50% tax + interest• 36 months: 60% tax + interest• 48 months: 70% tax + interest
|
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.
Related Articles:
