Missed Something in Your ITR? Now You Have 4 Years with Updated Returns!

Did you make an error while filing your Income Tax Return (ITR)? Maybe you forgot to declare some income, or you found a calculation mistake. Don’t worry. The Income Tax Department has simplified the process for correcting these errors with the Updated Tax Return (ITRU). The best part is that you now have more time to do it.

What is an Updated Tax Return (ITRU) and Why is it Important?

An Updated Tax Return (ITRU), filed under Section 139(8A) of the Income Tax Act, is a revised version of your original ITR. It allows taxpayers to correct mistakes, declare omitted income, or update any incorrect information from a previously filed ITR.

Why is it important? It provides an essential chance for taxpayers to become compliant without facing severe penalties. If you missed reporting income or underpaid your taxes, filing an ITRU gives you a way to fix this proactively. This approach helps you avoid potential scrutiny, notices, or harsher penalties from tax authorities later.

Extended Deadline: From 2 Years to 4 Years!

This change brings significant relief to many taxpayers. In the past, you had two years from the end of the relevant assessment year to file an ITRU. Now, this deadline extends to four years from the end of the relevant assessment year.

What does this mean for you? It means more time! For example, for income earned in Financial Year 2023-24 (Assessment Year 2024-25), you can now file an ITRU until March 31, 2029, instead of March 31, 2027. This added time gives you a chance to review your financial records, find discrepancies, and make corrections.

Penalties and Interest: What's the Cost of Correction?

While the ITRU allows you to fix your tax situation, it does come with costs in the form of penalties and interest, based on when you file it.

• If you file within 12 months (1 year) from the end of the relevant assessment year, you’ll need to pay an additional tax of 25% of the total tax and interest due.
• Example: If you owe  ₹10,000 in tax and  ₹1,000 in interest, the extra tax would be 25% of  ₹11,000, which equals  ₹2,750.
• If you file after 12 months but within 48 months (4 years) from the end of the relevant assessment year, the extra tax increases to 50% of the total tax and interest due.
• Example: Using the same numbers, the additional tax would be 50% of  ₹11,000, which equals  ₹5,500.

Besides this additional tax, you’ll also owe interest under Section 234A, 234B, and 234C for the delay in tax payment, just like a regular belated return. While these charges may feel high, they are generally less severe than penalties imposed by the tax department if an error is found during an assessment.

Who Can File an ITRU?

Any taxpayer who wants to declare additional income or increase their tax liability can file an ITRU. This usually includes situations like:

• Forgetting to declare income from certain sources (e.g., bank interest, capital gains, rental income).
• Under-reporting income.
• Incorrectly claiming deductions or exemptions, resulting in a lower tax payment.
• Correcting calculation errors in tax payable.

Who Should NOT File an ITRU?

It's also crucial to know when you cannot file an ITRU:

• If you want to claim a refund or increase a refund you already claimed. An ITRU is meant for tax payment or increasing tax liability, not for claiming refunds.
• If you are trying to decrease your tax liability.
• If you are filing for a loss.
• If the original ITR was a nil return (no income, no tax).
• If a search or survey operation has been initiated against you.
• If an assessment or re-assessment is pending or has been completed.
• If any prosecution proceedings have been started against you under the Income Tax Act.

Process and Requirements for Filing an ITRU

Filing an ITRU (Form ITR-U) requires following specific steps on the Income Tax e-filing portal:

• Log in to the Income Tax e-filing portal.
• Go to the "File Income Tax Return" section.
• Select the relevant Assessment Year.
• Choose "ITR-U" as the form type.
• Provide reasons for updating the return (e.g., omitted income, incorrect income category, etc.).
• Fill in necessary details, including previous ITR details, revised income, and the calculation of additional tax and interest.
• Generate a Challan 280 to pay the calculated additional tax and interest. This payment must be made before filing the ITRU, as the Challan details (BSR code, date of deposit, Challan serial number) are needed to complete the ITRU form.
• Verify the ITR-U using Aadhaar OTP, Net Banking, or DSC.

The extension of the ITRU filing deadline is a positive move by the tax department. It encourages voluntary compliance and gives taxpayers a chance to correct past mistakes. If you’ve found an error in your previous ITR, don’t delay. Use this extra time to update your return and ensure you are fully compliant.

Need expert assistance with your ITRU or any other tax filing? Don't navigate complex tax laws alone! Contact MyITRonline for seamless and accurate tax solutions.

Visit www.myitronline.com or call us at 9971055886, 8130309886.

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