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What is the ITR-U Form and How to File ITR-U?

ITR-U or Income Tax Return-Updated allows you to rectify and update your income tax return by reporting any additional income or correcting any mistakes you have made in your original, past, or revised return.

Have you ever made a mistake in your income tax* return (ITR) and wished you could correct it? Have you ever missed the deadline for filing your ITR and faced penalties or interest? Have you ever realised that you have yet to report some income or claim some deductions under section 80C in your ITR?
 

You are not alone if you answer yes to any of these questions. Many taxpayers face these situations every year and pay more tax than they should or lose out on refunds or benefits. But what if we tell you there is a way to update your ITR and rectify your errors or omissions without hassle or litigation?
 

The government has introduced a new concept of updated returns (ITR-U) in the Union Budget 2022.

What is ITR-U?

ITR-U stands for Income Tax Return - Updated. This form enables you to update your income tax return by reporting any additional income or correcting any mistakes you have made in your original, past, or revised return. The reason for introducing the ITR-U form is to help taxpayers to meet their tax obligations more effectively, avoiding legal consequences. It also helps the government to collect more revenue from undisclosed or under-reported income.

The deadline for submitting ITR-U is 24 months after the conclusion of the applicable assessment year. ITR-U form is divided into two parts— A & B.
 

Part A is the general information section. Here, you must provide your personal details, such as PAN, name, Aadhaar number, assessment year, and more. You also have to mention whether you have filed a return previously for this assessment year, and if yes, then under which section and with which acknowledgement number and date.
 

Part B is the updated income tax return section, where you must fill out the ITR form you chose in Part A. You have to report your income from various heads. Also, claim deductions under various sections, such as 80C, 80D, 80G, etc. You must also disclose your assets and liabilities if your total income exceeds ₹50 lakhs.

Time Limit to File ITR-U

Here are the time-related ITR-U conditions:
 

You can file ITR-U for up to two years from the end of the relevant assessment year. For example, the return of FY 2022-23 can be updated till March 31, 2025.

How to Calculate ITR-U Return

If you want to compute your income tax on an updated return (ITR-U), you need to follow these steps:

  • Compute your total earnings from all sources, such as salary, business, capital gains, house property, etc.
  • Deduct any deductions or exemptions you are eligible for, such as 80C, 80D, 80G, etc.
  • Check the ITR-U applicability for tax rates. Then, apply the applicable tax rates on your taxable income to get your tax payable.
  • Add any interest or late-filing fees you may have to pay to file the updated ITR-U return.
  • Add the additional tax you must pay for taking the benefit of section 139 (8A) of the Income Tax Act. The additional tax is 25% or 50% of the tax amount, depending on when you file the ITR-U.
  • Subtract any tax deducted at source (TDS), tax collected at source (TCS), advance tax, or tax relief you have already paid or claimed.
  • The result is your net tax liability or refund that you have to pay or receive.

Who Can File ITR-U?

Regarding ITR-U eligibility, anyone who has made an error or omitted specific income details in any of the following returns can file an updated return:
 

  • Original return of income
  • Belated return
  • Revised return
     

Filing for an updated return is permissible in the following cases:
 

  • Did not submit the return
  • Missed return filing due date and the deadline for belated return
  • Inaccurate income declaration
  • Paid tax at the incorrect rate
  • Tax paid under the wrong head of income
  • To lessen the tax credit under section 115JB/115JC
  • To lower the carried forward loss
  • To lower the unabsorbed depreciation
     

You can file only one updated return for each assessment year as a taxpayer.

Who Cannot File ITR-U?
 

  • ITR-U filing is not available in the following cases:
  • The updated return has already been filed.
  • Submitting nil return/ loss return
  • For claiming/increasing the refund amount
  • An updated tax return results in lower tax liability
  • Initiation of search proceeding under section 132 against you.
  • Conduction of survey under section 133A
  • Calling off or seizure of assets, books, or documents by the Income Tax authorities under section 132A.
  • Pendency or completion of assessment/reassessment/revision/re-computation.
  • If you do not owe any extra tax (when your tax liability is balanced with TDS credit/losses and you do not have any other tax obligations).

Should You Pay Additional Tax When Filing ITR-U?

You may need to pay an extra tax depending on when you file your ITR-U. This additional tax is calculated based on the difference between the tax you owe with the updated return and the tax you owe with the original, late, or revised return.

Here are the rates for this additional tax:

ITR-U filed within

Additional Tax

12 months from the end of the concerned assessment year

25% of further tax + interest

24 months from the end of the concerned assessment year

 50% of additional tax + interest

How to File Form ITR-U?

According to Income Tax regulations, you must submit the revised return (ITR-U) alongside an updated version of the relevant ITR form (ITR 1 - 7).

Here are the steps to complete Form ITR-U:

  • Enter your PAN, name, address, email ID, mobile number, and date of birth in Part A - Personal Information.
  • Enter your Aadhaar number and link it with your PAN if not already done.
  • Select your status (individual/HUF/firm/company) and residential status (resident/non-resident) in Part B - Status.
  • Select your original/belated/revised ITR form number (ITR 1 – 7) and enter your acknowledgement number and date in Part C - Original/Belated/Revised Return Details.
  • Select the reason for filing the updated return from the given options in Part D - Reason for Filing Updated Return.
  • Provide the details of additional earnings in each head of income. A detailed break-up of each head is optional.
  • Enter the income declared per the original/belated/revised return and the updated income as per the updated return in Part E - Computation of Income and Tax Liability.
  • Share the total income. You may find this from ‘Part B-TI’ of the ITR form (1-7) submitted by you.
  • Enter the tax payable as per the original/belated/revised and updated returns. The difference between the two is the additional tax payable.
  • Enter the details of tax deducted at source (TDS), tax collected at source (TCS), advance tax, and self-assessment tax paid in Part F - Details of Taxes Paid.
  • Enter the details of your bank accounts at any time during the previous year in Part G - Bank Account Details.
  • Enter your verification details and sign the Part H - Verification declaration.
  • Attach the updated version of the ITR form (1-7) along with Form ITR-U and submit it online on the Income Tax portal.

Conclusion

ITR-U is a new form that lets you rectify and update your tax returns for up to two years from the end of the relevant assessment year. It is a voluntary and beneficial option for taxpayers who want to comply with the tax laws and avoid legal consequences. However, it also involves paying an additional tax of 25% or 50% on the additional tax liability along with interest. Therefore, you should file your ITR-U carefully and correctly after considering all the factors and implications.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions

What is the ITR U section?

ITR U section is a new provision in the Income Tax Act. It allows taxpayers to update their income tax returns by correcting errors or omissions within two years from the end of the relevant assessment year.

Who is eligible for ITR form U?

A person is eligible for ITR form U if they have furnished their original return of income, furnished a belated return, or submitted a revised return.

How do I file ITR-U online?

To file ITR-U online, you must visit the Income Tax e-Filing portal, log in using your credentials and follow the instructions.

Disclaimers

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not guaranteed issuance plans, and they will be subject to the Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and does not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication. However, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • Tax: * Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.