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Updated tax return is now called ITR-U

The Budget for the FY 2022-23 had allowed certain taxpayers to file updated tax returns, within 2 years of filing the original returns after paying taxes due. A taxpayer can file only one tax return per assessment year as an updated tax return.

itr-u

The income tax department has notified a new form called ITR-U that will be available to taxpayers to file updated tax returns for the financial years 2019-20 and 2020-21. Following are the key highlights of the ITR-U

  • After giving reasons taxpayers can use ITR-U within 2 years from the end of the relevant assessment year. In addition, the applicable ITR forms 1 to 7 also need to be used.
  • For the financial year 2019-20, the taxpayer will need to pay the due tax and interest along with an additional 50 percent amount of such tax and interest.
  • For the financial year 2020-21, the taxpayer will need to pay the due tax and interest along with an additional 25 percent amount of such tax and interest.
  • ITR-U cannot be filed if there is a reduction in the tax liability or if it results in an increase in the refund, loss, or any other claim.

 The reasons mentioned in ITR-U for filing updated returns are

    ➺ Return previously not filed

    ➺ Income not reported correctly

    ➺ Wrong heads of income chosen

    ➺ Reduction of carried forward loss

    ➺ Reduction of unabsorbed depreciation

    ➺ Reduction of tax credit

    ➺ Wrong rate of tax

    ➺ Others

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