[FAQs] Income Tax Returns (ITR) | Updated Returns

Section 139(5) allows a taxpayer to file a revised income return if he discovers an omission or error in the original return. However, the revised return can be filed three months before the relevant assessment year or before the completion of the assessment, whichever is earlier.

The Finance Act, 2022 has introduced the concept of updated return to allow an assessee a longer duration to file the return of income. An updated return can be filed within 24 months from the end of the relevant assessment year (subject to certain conditions). An updated return can be filed even after the expiry of time limits specified for the filing of a belated return or revised return of income.

In the financial year 2024-25, a person can file an updated return for the assessment years 2022-23 and 2023-24.

All taxpayers are eligible to file an updated return. However, such a return cannot be filed in the following circumstances:

• If an updated return is a return of a loss
• In case an updated return results in lower tax liability
• In case an updated return results in or increasing the refund
• In case of a search initiated against the assessee
• Where books of account or assets etc. are requisitioned in case of the assessee
• In case survey conducted against the assessee
• Where documents or assets seized or requisitioned in case of any other person belong to the assessee
• In case an updated return has already been filed
• In case assessment is pending or completed
• In case AO has information about the assessee under specified Acts
• In case AO has information about the assessee under DTAA or TIEA
• In case any prosecution proceeding is initiated or
• In case of a person or class of persons as notified by the CBDT.

No penalty or fee is levied upon a person who wishes to furnish an updated return. However, he is required to pay an additional tax in accordance with Section 140B.

The additional tax shall be equal to 25% of the aggregate of tax and interest payable by a person on the filing of the updated return, where such return is furnished after the expiry of the due date of filing of belated or revised return but before completion of a period of 12 months from the end of the relevant assessment year.

Where the updated return is furnished after the expiry of 12 months from the end of the relevant assessment year but before completion of the period of 24 months from the end of the relevant assessment year, the additional tax payable shall be 50% of the aggregate of tax and interest payable.

Further, a fee under Section 234F shall be charged if such a person did not furnish a return of income for that Assessment Year for which he is furnishing an updated return.

No separate ITR forms have been notified for filing an updated return. A taxpayer is required to furnish an updated return on those ITR forms notified for the respective Assessment Year for which an updated return is to be furnished. Such an ITR form is to be filed along with the newly notified form ITR-U.

ITR-U seeks the following additional details from the taxpayers:

Part A General Information (ITR-U)

This part of ITR-U seeks general information from taxpayers related to the filing of an updated return. It includes the following:

• Are you eligible to file an updated return? i.e., a person is not falling in such circumstances wherein an updated return ca not be filed.
• Selecting the ITR form for filing an updated return
• Reasons for updating income. This includes reasons such as returns previously not filed, income not reported correctly, wrong heads of income chosen, etc.
• Are you filing an updated return within 12 months from the end of relevant AY or between 12 to 24 months from the end of relevant AY?
• Are you filing an updated return to reduce carried forward loss, unabsorbed dep., or tax credit?

Part B – Computation of updated income and tax payable (ITR-U)

This part of ITR-U includes heads of income under which additional income is reported. The taxpayer is required to mention only additional income. As reported in Part B TI of the ITR form, total income shall also be reported here to compute the additional tax payable by the assessee on the updated return.

Adjustments such as previously paid tax, refund issued to the taxpayer, and fee for default in the furnishing of return of income under Section 234F shall be considered while calculating such additional tax.

Tax Payments (ITR-U)

This part of ITR-U includes details of tax payment by the assessee on the updated return under Section 140B and details of payments of advance tax, self-assessment tax, and regular assessment tax, the credit for which has not been claimed in the earlier return.