What is ITR-U?
Taxpayers will now be able to update their returns at any time within the next 2 years from the end of the relevant assessment year. E.g., The Return of FY19-20 can be updated till 31st March 2023. In case of any errors or omissions in their initial tax returns, they can amend them by filing Form ITR-U. This concept of updating returns was announced in the recent Union Budget 2022.
The Form ITR-U has three parts- General information, ATI computation of total updated income, and tax payable and tax payments as per updated return. You can visit the ‘downloads’ section on the e-filing portal and download the excel utility or the JSON schema. You can update these and upload them on the portal. Currently, the utility is available only for ITR 1 and 4. The return shall be considered valid only if additional taxes are paid.
Additional taxes to be paid while filing ITR-U
| ITR-U filed within | Additional Tax | Interest |
| 12 months | 25% of the tax due | On the extra income |
| 24 months | 50% of the tax due | On the extra income |
Your total income tax liability would be as under:
Total Income Tax Liability= Tax Payable + Interest +Late-filing fees + Additional Tax
Total Income Tax Liability (as above) – TDS/TCS/Advance Tax/Tax Relief = Net Tax Liability
When can I file ITR-U?
You can use ITR-U to update your income in the following cases:
- Return not filed previously
- Income was not reported correctly
- Chose incorrect heads of income
- Loss to be carried is less than what was reported
- Unabsorbed depreciation to be carried is less than what was reported
- Tax credit u/s 115JB/115JC reduction
When are you not allowed to file ITR-U?
You cannot file ITR-U for the following cases:
- You wish to claim a loss
- The updated return leads to a reduction in your income tax liability
- The updated return leads to an increase in the amount of your refund
- Search proceedings are initiated
- A survey is being carried on
- Any assessment proceeding, revaluation, recalculation, or revision is pending or completed in respect of the initial return.
- The Assessing Officer has received information against the taxpayer under a few specified Acts.
For any clarifications/feedback on the topic, please contact the writer at ektha.surana@clear.in
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