FAQ’s on Updated Return (ITR-U) – Section 139(8A) of the Income Tax Act

1. What is an Updated Return?

• Updated return also referred to as ITR U is a benefit provided to assessees.
• Assessees are allowed to
  1. File returns for financial years in respect of which the due date for filing has expired (or)
  2. To update details in the already furnished returns in respect of which the due date of revision has expired.
• ITR U is introduced as per the provisions of section 139(8A) of the Income Tax Act, 1981.

2. What are the cases where the filing of an Updated Return is not allowed?

• An Updated Return cannot be filed in the following cases:
  1. If the updated return is a loss return
  2. If the updated return has the effect of decreasing the total tax liability.
  3. If the updated return results in a refund or increases the amount of refund.

3. Prohibition to file updated returns

• A person shall not be eligible to furnish an updated return, where,
  1. A search has been initiated under section 132
  2. Books of accounts/other documents/any assets are requisitioned under section 132A
  3. A survey has been conducted under section 133A

For the above-mentioned cases, an updated return cannot be filed 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 to such assessment year.

• If assessment/reassessment/recomputation or revision is pending or has been completed for a particular assessment year.
• If any information has been received u/s 90 or 90A and the same has been communicated to him before the date of furnishing the updated return.

4. Can an updated return be filed for an assessment year more than once?

• No, an updated return under section 139(8A) can be filed only once in respect of the relevant assessment year.
• An updated return cannot be revised/altered or canceled.

5. What is the time limit for filing an updated Return?

• An updated return (ITR-U) can be filed within 24 months from the end of the relevant assessment year.
• Note:
  1. ITR U for FY 18-19/AY 19-20 cannot be filed since the due date has elapsed (31st March 2022)
  2. ITR U for FY 19-20/AY 20-21 should be filed on or before 31st March 2023
  3. ITR U for FY 20-21/AY 21-22 should be filed on or before 31st March 2024

6. Is there any penalty or late fees for filing an updated return?

• A person shall be allowed to file an updated return only upon payment of additional income tax
  1. If ITR-U is filed within the expiry of 12 months from the end of the relevant assessment year – 25% of aggregate tax and interest payable
  2. If ITR-U is filed within the expiry of 24 months from the end of the relevant assessment year – 50% of aggregate tax and interest payable
• Penalty under section 234F will be levied for delayed filing of return to the extent of,
  1. If annual income is more than or equal to Rs. 5,00,000 – Rs. 5,000
  2. If annual income is less than Rs. 5,00,000 – Rs. 1,000

7. Calculation for tax liability for filing an updated return

• If an original return has been filed (including revised and belated returns)

• If an original return has not been filed

Note: Additional income tax at the rate of 25 or 50% shall not be charged on the penalty under section 234F.

8. Is it possible to file an updated return if there is no tax payable?

• No, an updated return cannot be filed if there is no tax payable
• However, an updated return can be filed in the following cases, even if it does not result in any additional tax payable,
  1. In cases of a reduction of
     • Loss
     • Chapter VI A deductions
     • Unabsorbed depreciation
     • MAT or AMT credit claimed
  2. In cases where the total income is less than Rs. 5,00,000/7,00,000 as the case maybe and the individual has claimed rebate u/s 87A thereby paying zero tax, he/she can file an updated return without any tax payable after paying the late fees u/s 234F (Refer FAQ no. 6 for the late fee)

Note: An updated return cannot be filed if the tax payable is set off entirely by available TDS/TCS credit.