Everything you need to know about the ITR-U

Introduction:
 1. Section 139(8A) under the Income Tax Act allows you a chance to update your ITR within two years.
 2. 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.
 3. Updated Return can be filed only if there is an increase in tax liability.

An Updated Return can be filed in the following cases:
 1. Did not file the return. Missed return filing deadline and the belated return deadline
 2. Income is not declared correctly
 3. Chose wrong head of income
 4. Paid tax at the wrong rate
 5. To reduce the carried forward loss
 6. To reduce the unabsorbed depreciation
 7. To reduce the tax credit u/s 115JB/115JC
A taxpayer can file only one updated return for each assessment year(AY).

Who is not eligible to file ITR-U u/s 139(8A)?
Non Eligibility:
 1. Updated return is already filed
 2. For filing nil return/ loss return
 3. For claiming/enhancing the refund amount.
 4. When updated return results in lower tax liability
 5. Search proceeding u/s 132 has been initiated.
 6. A survey is conducted u/s 133A
 7. Books, documents or assets are seized or called for by the Income Tax authorities u/s 132A.
 8. If assessment/reassessment/revision/re-computation is pending or completed.
 9. 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?
 1. The time limit for filing ITR-U is 24 months from the end of the relevant assessment year.
 2. The Return of FY 22-23 (AY 2023-24) can be updated till 31st March 2026.
 3. The Return of FY 21-22 (AY 2022-23) can be updated till 31st March 2025.
 4. The Return of FY 20-21 (AY 2022-23) can be updated till 31st March 2024.

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 if the updated return is filed within 12 months and 24 months respectively from the end the assessment year.