ALL ABOUT UPDATED RETURN

 

The Finance Act, 2022 introduced the concepts of “Updated return” and “Additional Tax”.

Now, the assesses who have not filed their Return of Income can file the same via “Updated Return” within 24 months from the end of relevant assessment year. Assesses who have already been filed their Return of Income but wish to correct the amounts, disclosures, errors, omissions, etc can update their return too within 24 months from the end of relevant assessment year.

So, The Central Board of Direct Tax introduced the form and manner of filing an Updated Return vide notification no 48/2022 dated 29^th April, 2022. The New form "ITR-U" has been notified to file an Updated Return.

The table below summarizes the basic concepts of Updated Return.

ITR Form	ITR-U
Section	139(8A)
Rule	12AC
Notification	48/2022 dated 29-04-2022 vide, G.S.R 325E
Time Limit to File	Within 24 Months from the end the relevant assessment Year.
First AY of which an Updated return can be filed	AY 2020-21
Additional Tax to be paid	25% of Income Tax if the Updated return is filed within 12 months from the end to the relevant Assessment Year.   50% of Income Tax Payable if the Updated return is filed after 12 months but before 24 months from the end to the relevant Assessment Year.   So, the First Updated return can be filed with 50% of Additional Tax.
Who/When an Updated return cannot be filed	(a)  To file a Return of Loss       (b) To decrease the Tax Liability       (c)  To get the Refund       (d) To increase the refund     (e)  When search u/s 132/132A has been initiated       (f)   When Survey u/s 133A is undertaken    (g) If Updated return for the relevant    Assessment Year has already been filed  (h) Assessment/Re-assessment/recomputation/revision for that relevant AY is pending/completed    (i) Prosecution under chapter XXII is initiated.

Footnote

Ø An Updated return is to be filed along with ITR-1 to ITR-7 as applicable to the assessee.

Ø An updated return can be file only when “Additional Tax” is to be paid u/s 140B.

Ø Additional Tax varies from 25%-50% depending upon the delay in filing the Updated return.

Additional Tax is 25% of Income Tax Liability (Tax+Cess+Surcharge+Interest) if Updated return is filed within 12 months from the end of relevant AY

Additional Tax is 50% of Income Tax Liability (Tax+Cess+Surcharge+Interest) if Updated return is filed within 12 months from the end of relevant AY

Ø Interest u/s 234A, 234B and 234C is recomputed on the basis of admitted tax liability in Updated return. So, Interest is not charged again on Additional Tax

Ø Additional Tax is not calculated on Late Filing Fees.

Example: Mr. Ram has not filed his Return of Income for AY 2021-22. His total Income for the said AY is Rs. 12 Lakhs.

Now his income Tax Liability will be as below, considering the Updated Return is filed in May 2022.

 

Particulars	Amount (Rs.)
Income Tax (Old Regime)	1,72,500
Add: Health and Education Cess	6,900
Total	1,79,400
Add: Interest u/s 234A	17,940
Add: Interest u/s 234B	25,116
Add: Interest u/s 234C	9,057
Total Tax Payable	2,31,513
Add: Additional Tax @ 25%	57,878
Add: Late filing Fees	5,000
Final Tax Payable	2,94,391

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CA Ramakrishna Sanjay