ITR-U ( For past 2 years)

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Income Tax
ITR-U ( For past 2 years)

About This Plan

ITR-U is the Form used for updating your income tax return. The government introduced the concept of updated returns in the Union Budget 2022.

What is ITR-U?

Have you ever forgotten to report an income or made a mistake in your ITR?
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 optimise tax compliance by taxpayers without provoking legal action. Read on to learn more about ITR-U.

Who can file ITR-U?

Any person who has made an error or omitted certain income details in any of the following returns can file an updated return:

Original return of income, or
Belated return, or
Revised return

An Updated Return can be filed in the following cases:

Did not file the return. Missed return filing deadline and the belated return deadline
Income is not declared correctly
Chose wrong head of income
Paid tax at the wrong rate
To reduce the carried forward loss
To reduce the unabsorbed depreciation
To reduce the tax credit u/s 115JB/115JC

A taxpayer could file only one updated return for each assessment year(AY).

Who is not eligible to file ITR-U?
ITR-U cannot be filed in the following cases:

Updated return is already filed
For filing nil return/ loss return
For claiming/enhancing the refund amount.
When updated return results in lower tax liability
Search proceeding u/s 132 has been initiated against you
A survey is conducted u/s 133A
Books, documents or assets are seized or called for by the Income Tax authorities u/s 132A.
If assessment/reassessment/revision/re-computation is pending or completed.
If there is no additional tax outgo (when the tax liability is adjusted with TDS credit/ losses and you do not have any additional tax liability, you cannot file an Updated ITR)

What is the time limit to file ITR-U?

The time limit for filing ITR-U is 24 months from the end of the relevant assessment year.
ITR-U is applicable from 1st April 2022. So during the current financial year 2022-23, you can file ITR-U for AY 2020-21 and AY 2021-22.
E.g., The Return of FY19-20 can be updated till 31st March 2023.

Should you pay additional tax when filing ITR-U?

Yes, you will have to pay an additional tax of 25% or 50% on the tax amount, depending on when you file the ITR-U.

ITR-U filed within	Additional Tax
12 months from the end of relevant AY	25% of additional tax + interest
24 months from the end of relevant AY	50% of additional tax + interest

1. Basics of Income Tax? And different Heads of Income Tax.

Everyone who earns or gets an income in India is subject to income tax. (Yes, be it a resident or a non-resident of India). Also read our article on Income Tax for NRIs. Your income could be salary, pension or could be from a savings account that’s quietly accumulating a 4% interest. Even, winners of ‘Kaun Banega Crorepati’ have to pay tax on their prize money. For simpler classification, the Income Tax Department breaks down income into five heads:

Head of Income	Nature of Income covered
Income from Salary	Income from salary and pension are covered under here
Income from Other Sources	Income from savings bank account interest, fixed deposits, winning KBC
Income from House Property	This is rental income mostly
Income from Capital Gains	Income from sale of a capital asset such as mutual funds, shares, house property
Income from Business and Profession	This is when you are self-employed, work as a freelancer or contractor, or you run a business. Life insurance agents, chartered accountants, doctors and lawyers who have their own practice, tuition teachers

2. Income Tax Payers & Income Tax Slabs

Click on the link to read the Income Tax Slabs:

https://ideationadvisory.in/tds-rate-w-e-f-1-apr-2020

3. When it is mandatory to file return of income?

It is mandatory to file return of income for a company and a firm. However, individuals, HUF, AOP, BOI are mandatorily required to file return of income if the income exceed basis exemption limit of Rs 2.5 lakhs. This limit is different for senior citizens and super senior citizens.

4. Can i file return of income even if my income is below taxable limits?

Yes, you can file return of income voluntarily even if your income is less than basic exemption limit

5. What documents are to be enclosed along the return of income?

There is no need to enclose any documents with the return of income. However, one should retain the documents to produce before any competent authority as and when required in future.

6. Should I disclose all my income in the return even if it is exempt?

Yes. Income from every source including exempt income must be disclosed. The same can be shown under the Schedule EI.

7. What is the due date for IT Return for Assessment Year 2020-21?

(a) The due date to file income tax returns for AY 2020-21 stands extended from 31 July to 30 November 2020. The due date for tax audit stands extended from 30 September 2020 to 31 October 2020. Similarly, the income tax returns filed upon a tax audit are now due by 30 November 2020.

(b) Reduction in TDS and TCS rates by 25% of the present rates, for payments from 14 May till 31 March 2021.

(d) The last date for completion of assessments which are getting time-barred on 30 September 2020 stands extended to 31 December 2020. In the case of assessments which get time-barred on 31 March 2021, the time stands extended to 30 September 2021.

(e) The last date of making payment under Vivaad se Vishwas Scheme without additional amount stands extended to 31 December 2020.

31 January	31 March	31 July	Oct – Nov
Deadline to submit your investment proofs	Deadline to make investments under Section 80C	Last date to file your tax return	Time to verify your tax return

The official notification is here: click here to read more – Press release dated 13 May 2020

8. What is belated return?

As the name suggests, belated tax returns are when you file your tax returns after the extended returns filing deadline under Section 139(4) of the IT Act.

From the start of the new financial year on April 1^st to July 31^st, you get a window of 4 months to file your tax returns for the previous year. In case if you miss this July 31^st deadline, you can still file the returns until December 31^st by paying a penalty of Rs. 5,000. Returns filed after December 31^st attract a penalty of Rs. 10,000.

But if you miss this extended due date of filing tax returns, you have the option to file a belated return.

As per the 2016 Finance Act amendment, belated tax returns can be filed within a year before the relevant Assessment Year, or AY ends. For instance, belated returns for AY 2018-19 could be filed by up to March 31^st, 2019.

Late payment notice:

It is possible that you will receive a notice from the IT department if you have not filed returns for a particular year for more than two years. If you do receive one such notice, make sure that you start preparing the tax returns and file it as soon as possible. This can be done online by visiting the official TIN NSDL website.

Alternatively, you can also fill the returns filing form online and then submit the same to the IT officer of your ward. In case if you want to make any changes to the belated ITR, the same can be done until the end of the relevant AY.

9. Why should you avoid filing Belated Returns?

There can be some severe outcomes if you do not file your tax returns on time. Some of the most significant ones are:

Penalty
As mentioned in the beginning, you will have to pay a penalty of up to Rs. 10,000 for not filing tax returns until December 31st of the relevant AY. This penalty only became applicable from AY 2018-19 under the new Section 234F.
No Carry Forward of Losses
Only loss from house property can be carried forward if you are filing a belated tax return. All the other losses like losses in capital gains, business/profession losses, etc. cannot be carried forward if you file belated returns.
Interest Penalty in Case of Non-Payment
It is also possible that you might still have income taxes payable to the IT department. As you have not filed ITR, you might not know about this liability. The unpaid tax amount will then start attracting an interest penalty at the rate of 1% every month.

There are a lot of things that could go wrong if you fail to file your tax returns before the deadline every year. If you were unable to file the returns before the July 31^st deadline, make sure that you at least file it before December 31^st of the relevant AY.

Also, start preparing your tax returns in advance so that you don’t have to rush when the filing due date is just around the corner. Filing returns in a hurry is the most common reason why people end up making mistakes.

10. What is Revised Return?

Revised return allows you to rectify the error or omission of facts made at the time of filing your original ITR. Filing a revised return simply means filing your return again but this time with the correct information. When filing a revised return you need to mention details of the original return

Who can file it?
Every assessee who has filed his/her ITR is entitled to revise it under section 139(5) to provide correct information to the tax department. Earlier, only those taxpayers who had filed ITR before the expiry of the deadline were allowed to revise their returns.
Now, even belated returns can now be revised after the expiry of original deadline to file ITR.

Last Date to file Revised ITR:

Starting from FY 2018-19, the time limit to revise the ITR has been reduced. According to current income tax laws, you now only have time till the completion of the relevant assessment year to rectify your mistake. Thus, once you have filed ITR for FY2019-20, you have time till March 31, 2021 to correct your mistake, if any.

₹1,500.00