Government notifies form for filing updated ITR

The Income Tax Department has notified a new form for filing updated IT returns in which taxpayers will have to provide the exact reason for filing it along with the amount of income to be allowed to tax.

The new form (ITR-U) will be available for taxpayers to file updated income tax returns for the financial years 2019-20 and 2020-21.

Taxpayers filing ITR-U, which can be filed within 2 years from the end of the relevant assessment year, have to give reasons for updating income – return not already filed or not reporting income correctly Selection or reduction of income made or wrongly carried forward loss.

The reasons given in the form include shortfall in unabsorbed depreciation or reduction in tax credit u/s 115JB/115JC or incorrect rate of tax or other reasons given by the taxpayers.

Budget 2022-23 has allowed taxpayers to update their ITRs within two years of filing, subject to payment of taxes, a move aimed at helping correct any discrepancies or omissions.

A taxpayer will be allowed to file only one updated return per assessment year.

Nangia & Co LLP Partner Shailesh Kumar said that the layout of the form has been kept very precise to help the assessee to input the relevant information easily.

“Furthermore, it may be noted that the amount of income to be allowed to tax is to be specified under the prescribed income heads. No statement of income or any detail information is required to be furnished unlike regular ITR forms The correct reason for filing the updated return is to submit it in the form itself,” Kumar said.

Tax and consulting firm AKM Global Partner-Tax Sandeep Sehgal said taxpayers desirous of filing it for the financial year 2019-20 will have to pay an additional 50 per cent of such tax and interest along with the tax and interest due.

For those looking to file for FY2020-21, the additional amount will be 25 per cent of the tax and interest payable.

Sehgal said, “An updated return is not allowed to be filed, if it has the effect of showing loss or reducing the total tax liability already prescribed or increasing the refund or refund. Appropriate disclosure is required in the form in this regard. “

Kumar said the form is expected to be updated regularly with every passing year to make it more comprehensive for analysis and processing by the Income Tax Department.

“While the return can be verified through a Digital Signature Certificate (DSC) only in tax audit cases and the return can be filed by a political party, Electronic Verification Code (EVC) is an option in non-tax audit cases. Maybe. The option of verification has not been specified by posting the acknowledgment in Bangalore,” Kumar said.

At present, if the IT department finds that some income has been missed by the assessee, it goes through a lengthy process of adjudication, and the new proposal will re-establish trust in the taxpayer.

“In order to provide an opportunity to rectify such errors, I am proposing a new provision allowing taxpayers to file an updated return on payment of additional tax. This updated return shall be made for two years from the end of the relevant assessment year.” be filed within,” Finance Minister Nirmala Sitharaman had said in her 2022-23 budget speech.

An additional 25 per cent will have to be paid on the tax and interest due if the updated ITR is filed within 12 months, while this rate will increase to 50 per cent if filed after 12 months but before 24 months. End of relevant assessment year.

However, if prosecution proceedings are initiated by issuing a notice for a particular assessment year, the taxpayer cannot avail the updated return benefit in that particular year.

Also, if a taxpayer files an updated return and does not pay the additional taxes, the return will become invalid.

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