Can You Re-file Income Tax Return? Know What Is ITR-U and How To File It

Spotted a mistake in your ITR? Don’t sweat it! Here’s your chance to hit the rewind button. An Updated Income Tax Return, also known as ITR-U, is a way to rectify mistakes or omissions made in a previously filed ITR. It essentially allows you to re-file your return for a particular assessment year.

The Finance Act 2022

Updated Return: The Finance Act 2022 introduced subsection (8A) in section 139 of the Income Tax Act, allowing for the filing of an updated return. In 2022, the union government proposed that taxpayers could file this updated return within two years from the end of the relevant assessment year, subject to the payment of additional tax.

• Objective: Rectifying errors or omissions in a previously submitted ITR.
• Deadline: You may submit ITR-U within two years from the conclusion of the pertinent assessment year.
• Non-Refundable: ITR-U is ineligible for claiming tax refunds; its use is restricted to instances necessitating additional tax payments.

Why An Updated Return Provision?

The provision was unveiled by Union Finance and Corporate Affairs Minister Nirmala Sitharaman during the presentation of the Union Budget for the financial year 2022-23.

FM Sitharaman expressed that this provision would allow taxpayers to rectify any omissions or errors in accurately assessing their income for tax purposes.

She further highlighted that in cases where the Income Tax department identifies missed income by the taxpayer, it typically entails a protracted adjudication process. The proposal aims to instil trust in taxpayers.

She had said “It is an affirmative step in the direction of voluntary tax compliance.”

Updated ITR: Highlights

• Inclusion of a provision allowing for the filing of an Updated Return upon payment of additional tax.
• Empowerment for the assessee to disclose previously overlooked income.
• Filing is permissible within two years from the conclusion of the relevant assessment year.

Who Can File An Updated ITR?

According to details outlined by Income Tax India on its website, the section stipulates that any individual can submit an updated return, regardless of whether they’ve previously filed the original, belated, or revised return for the applicable assessment year.

An updated return can be lodged within 24 months from the conclusion of the pertinent assessment year. Nonetheless, there are certain circumstances under which an updated return cannot be submitted.

For example:

• You can file ITR-U for the Assessment Year (AY) 2021-22 (financial year 2020-21) till March 31, 2025.
• Similarly, you can file ITR-U for AY 2022-23 (financial year 2021-22) till March 31, 2026.

When Is ITR-U Not Available?

An updated return is ineligible for submission if it pertains to a return reporting a loss.

Furthermore, it is not permissible to file an updated return if doing so would reduce the tax liability as calculated based on the original, revised, or belated return filed by the assessee.

Additionally, an updated return cannot be filed if it would result in or augment the refund due based on the original, revised, or belated return submitted by the assessee.

To file an updated ITR, you need to:

Choose between online or offline filing methods.

For offline filing:

• Download the ITR-U form from the Income Tax Department website.
• Fill out the form meticulously, ensuring all errors or omissions are corrected.
• Attach necessary documents, such as proof of income, deductions, and exemptions.
• Settle any outstanding taxes.

For online filing:

• Access the e-filing website of the Income Tax Department.
• Log in to your account.
• Select the ITR-U form and initiate the filing process.

If uncertain about the necessity of filing an updated ITR, seek advice from a tax advisor.