The Income Tax Department has recently made significant updates to the ITR (U) form, also known as the Updated Income Tax Return. This form allows taxpayers to rectify errors or omissions in their previously filed returns. Here’s a detailed look at the latest changes and what they mean for taxpayers:
What is ITR (U)?
ITR (U) is a provision under Section 139(8A) of the Income Tax Act, which allows taxpayers to file an updated return within two years from the end of the relevant assessment year. This form is particularly useful for correcting minor errors or omissions in the original return.
Key Updates:
- Extended Filing Deadline: The deadline for filing revised and belated ITRs has been extended to January 15, 2025. This extension is to enable taxpayers to claim the Section 87A tax rebate3.
- Manual Editing for Rebate Claims: Taxpayers can now manually edit the tax rebate column in the ITR excel utility to claim the Section 87A tax rebate. This is necessary due to the outdated JSON schema in the processing software.
- HTML Utilities: The Income Tax Department has updated the Excel utilities for ITR Forms 2 and 3 and announced that HTML utilities will be released soon.
- Restrictions on ITR (U): ITR (U) cannot be filed for nil returns, loss returns, or to claim/enhance refunds. It is only for correcting errors or omissions2.
How to File ITR (U):
- Gather Necessary Documents: Collect all relevant documents such as Form 16, Form 26AS, bank statements, and other income-related documents.
- Download the Utility: Select and download the appropriate ITR form from the Income Tax Department’s website.
- Fill in Details: Enter the correct details, including income from various sources, deductions, and taxes paid.
- Compute Tax Liability: Calculate your tax liability using an online tax calculator.
- Pay Pending Taxes: Pay any pending taxes before submitting the ITR.
- File the ITR: Submit the ITR form online on the Income Tax Department’s website.
The provision of section 139(8A) shall not apply, if the updated return
(a) is a return of a loss; or
(b) has the effect of decreasing the total tax liability determined on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5); or
(c) results in refund or increases the refund due on the basis of return furnished under sub-section (1) or sub-section (4) or sub-section (5), of such person under this Act for the relevant assessment year:
Further, a person shall not be eligible to furnish an updated return under this sub-section, where
(a) a search has been initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A in the case of such person; or
(b) a survey has been conducted under section 133A, other than sub-section (2A) of that section, in the case of such person; or
(c) a notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person; or
(d) a notice has been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A in the case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person, for the assessment year relevant to the previous year in which such search is initiated or survey is conducted or requisition is made and any assessment year preceding such assessment year:
(e) any proceeding for assessment or reassessment or re-computation or revision of income under this Act is pending or has been completed for the relevant assessment year; or
(f) the Assessing Officer has information in respect of such person for the relevant assessment year in his possession under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976) or the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) or the Prevention of Money-laundering Act, 2002 (15 of 2003) or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) and the same has been communicated to him, prior to the date of furnishing of return under this sub-section; or
(g) information for the relevant assessment year has been received under an agreement referred to in section 90 or section 90A in respect of such person and the same has been communicated to him, prior to the date of furnishing of return under this sub-section; or
(h) any prosecution proceedings under the Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of furnishing of return under this sub-section; or
(i) he is such person or belongs to such class of persons, as may be notified by the Board in this regard:
Important Considerations:
- Manual Editing Required: For claiming the Section 87A tax rebate, manual editing of the tax rebate column is necessary.
- JSON Schema Issue: The processing software’s JSON schema is outdated, causing issues with rebate claims. The department has been working on updating it.
Conclusion:
The recent updates to the ITR (U) form are a positive step towards improving tax compliance and providing taxpayers with the opportunity to correct their returns. However, taxpayers must be aware of the manual editing requirement and the ongoing issues with the processing software.
