18 Jan 2023Budget 2022 introduced a very important provision, which will provide lot of convenience to many assessees including NRIs, Non-residents, Seafarers. As per the existing law, due date of Income Tax Return filing is July 31 of the assessment year. Belated date for filing the Income Tax Return is Dec 31 of the assessment year. However, after Dec 31 of assessment year, Income Tax Return cannot be filed. Hence, there is no mechanism to file an ITR after Dec 31. Hence, if due to some unavoidable circumstances or other reasons, an assessee misses his Income Tax Return filing by Belated Date then it was leading to harsh penal provisions and notices by the Income Tax Department. Now, to overcome this problem, assessee has been provided a new window.
An opportunity to the tax payers who missed or mistakenly filed ITR in earlier years is enabled U/s 139 (8A) in order to avoid the future litigations– Updated Return (ITR U)
Benefit To NRIs, Seafarers, OCIs: Updated Income Tax Return is important provision for NRIs, Seafarers who missed filing ITR due to various reasons, however, they otherwise wanted to file the Income Tax Return. Important to note here, if there is any financial transaction, TDS, Interest, Foreign assets is reflecting in tax department records, and there is no ITR in Income Tax Department records, this leads to enquiry notices from tax department. Updated ITR provision provides window for 3 years now, hence, NRIs, Seafarers, Other Non-residents can opt this option and plug various IT Department notices through filing of Updated Income Tax Return.
What is ITR-U?
ITR U allows you a chance to file your ITR within two years from the end of the assessment year if:
- You have failed to file your income tax return within the prescribed time limit
- You wish to disclose any additional income
| An Updated Return Can be filed if: | An Updated Return Cannot be filed if: |
|---|---|
| Return previously not filed | If updated return is return of loss |
| Income not reported correctly | If updated return is reducing Income Tax Liability in return filed earlier |
| Wrong heads of income chosen | If updated return results in the increase of Refund |
| Reduction of carried forward loss | If search has been initiated under section 132 |
| Reduction of unabsorbed depreciation | If books of Accounts or any other documents are requisitioned under section 132A |
| Reduction of tax credit u/s 115JB/115JC | If survey has been conducted under section 133A |
| Wrong rate of tax | If any proceeding of assessment, reassessment, re-computation or revision is pending or completed for that relevant year |
Time limit to file ITR-U
The time limit for filing ITR-U is 24 months from the end of the relevant assessment year.
| Financial Year | Last Date for Filing ITR- U |
|---|---|
| 2019-20 | 31-03-2023 |
| 2020-21 | 31-03-2024 |
| 2021-22 | 31-03-2025 |
Additional Tax Payment:
| 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 |
**An assessee would be able to file only one updated return for each assessment year.