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Introduction:

The Finance Bill 2022 introduced a new concept: a revised tax refund that allows taxpayers to amend their ITR within less than two years of filing, provided taxes have been paid.

Recently, the Central Board of Direct Taxes (CBDT) issued a new ITR Form U for filing updated income tax returns. When using this form, taxpayers must indicate the reason for the filing and the amount of tax due. The new form ITR–U allows taxpayers to file amended returns.

ITR-U:

The ITR-U, or Updated Income Tax Return, is a form that allows taxpayers to amend their ITR by correcting errors or omissions within two years of the end of the relevant assessment year For instance, if you filed an ITR for AY 2023-24 and missed the revised/belated return filing window, you can submit an ITR-U after the end of the assessment year, i.e., 31st March 2024, but within two years thereafter, i.e., by 31st March 2026. It’s important to note that ITR-U filing for AY 2023-24 commenced on 1st January 2024.

In the Union Budget 2022, the Government of India introduced ITR U, a revised income tax return that empowers taxpayers to prepare and update their tax returns within 24 months after the end of the relevant assessment year .

Eligibility to file ITR-U: 

Any person or entity having excess income can file an ITR-U for declaration purposes, if they have already filed return of income for the relevant assessment year. This includes businesses, political parties or individuals making mandatory tax returns under section 44AB. Even if the taxpayer has not filed the income tax return for the relevant assessment year, the ITR-U form can be filed for revised return.

An Updated Return can be filed under the following circumstances:

• The Updated Return can be filed in cases where the return was not filed or when both the original return filing deadline and the belated return deadline were missed.
• Selected the wrong income category.
• To minimize losses carried forward.
• For reduction of tax liability under section 115JB/115JC.

Not eligible to file ITR-U:

ITR-U cannot be filed in the following scenarios:

• To submit a zero return or loss return.
• It reduces taxes when an updated return is filed.
• If the tax authorities have initiated an investigation against you under Section 132, you are not eligible to file an ITR-U.
• You are not eligible to file ITR-U if the tax authorities have seized your books, documents or assets under Section 132A.
• If there is no additional tax liability (when your owed tax is offset by tax already deducted or losses), you are not permitted to file an updated return.
• If you already submit an updated return, you are not allowed to submit a new one.

Conditions to File an ITR-U:

ITR U is accessible to all taxpayers who have previously submitted an original return, a belated return, or a revised return. However, specific conditions must be met to file an updated return:

• The updated form must be submitted within the specified period, which is 24 months from the end of the relevant assessment year.
• If the taxpayer has forgotten to file returns for prior years, he or she must file an updated return to satisfy their unpaid obligations.
• The updated return must be filed using the same ITR form used for the original return.
• You can submit an updated return through the Income Tax Department of India e-filing website.

How to file ITR-U:

“The term ‘ITR-U’ can be used when talking about income tax returns in India. But if you are considering the process of filing an income tax return, the steps usually involve choosing the right ITR form if.” it depends on your source of income and finances.” status. As such.” Procedures may also change, and it is important to check for the latest information from government authorities or seek the advice of a tax professional. Here are the basic steps for filing an income tax return

The form consists of two parts: Part A and Part B. Please follow the instructions below to complete each part of the form:

Part A: General information:

• PAN
• Name
•  Assessment Year
• Select “yes” if you have filed the return previously for the assessment year.
• Aadhhar Card Number
• If yes, check the ITR acknowledgment (“Filed u/s”) and check whether it was filed under section 139(1) or any other section.
• Next, add the form number, receipt number, or receipt number to the original submission date (DD/MM/YYYY). You can find all these details in the ITR acknowledgment form.
• Review the eligibility conditions outlined above and select the appropriate option.
• Select the ITR form number.
• Then you need to know at least one reason for updating ITR-U. Multiple choices are allowed.
• If 12 months have passed since the end of the year you applied, select the ‘12-24 months option’. Otherwise select ‘Up to 12 months option’.

Part B:  Computation Of Total Updated Income :

•  Enter the additional income figures under each head of income. A detailed breakdown for each head is not necessary. 
• Enter the total income, which you can find a place in ‘Part B-TI’ of the ITR form (1-7) you have completed.
• Enter the income declared as per the last return.
• The amount due, if applicable, can be obtained from the ‘Amount due’ section of Part B-TT of the ITR form.
• Amount refundable
• Enter the taxable amount as per the last return filed.
• However, if a refund was claimed on the final return, enter the amount claimed.  Upon receipt of a refund, enter the total amount received including any interest on the refund.
• If the last return was filed late, please enter the late filing fee paid.
• Enter the regular assessment tax paid in the last return.

Time Limit to File ITR-U:

You can file the ITR-U form up to two years after the end of the tax year. This law will take effect on April 1, 2022. Therefore, you can update your 2020-21 and 2021-22 tax returns in the 2022-23 fiscal year. For example, if you want to update your tax return for the 2019-20 fiscal year, you have until March 31, 2023 to do so.

Verification  ITR-U:

However, if you are referring to the general process of verifying an income tax return, verification can be conducted through various methods. Please note that procedures may change, so it’s essential to verify the latest information from official sources or consult with a tax professional.

Here are some common methods for verifying an income tax return:

Electronic Verification:

• If your mobile number is linked to your Aadhaar, you can opt to get an OTP on your registered mobile number for electronic authentication.
• With online banks, you can log into your bank account and view your returns electronically, an option offered by many banks.
• Some banks offer taxpayers the opportunity to verify their returns using the bank’s ATM. Please check with your bank to see if this option is available.

Physical Verification:

• If you choose not to do the e-verification, you can download the ITR-V (verification form) from the Income Tax e-filing portal.
• Sign the ITR-V in blue ink and send the signed copy to the Centralized Processing Center (CPC) address given in the ITR-V form.

Conclusion :

Using an ITR-U to file an update is an important way to correct errors, update income returns, and ensure accurate tax returns. It gives taxpayers the opportunity to correct errors in the original return and better comply with tax laws. Taxpayers can easily go through the process and avoid penalties or legal ramifications by considering the ITR-U opinion and following the instructions provided.