The Finance Bill 2022, for achieving Tax inevitability, has introduced new provisions for filing updated tax returns under section 139(8A) of the Income Tax Act allowing taxpayers under certain conditions which are effective from 1st April 2022.
What is section 139 (8A)?
As per section 139 (8A) of the income tax act, those individuals who have not filed their returns or filed under section 139 (1), revised under section 139 (5), belated income tax returns 139 (4) can file form ITR-U i.e. Updated income tax returns under Section 139 (8A) within 24 months from the end of the pertinent assessment year.
However, there are certain conditions under which a taxpayer can not file an updated ITR. These are as follows-
When can you file an updated return under section 139(8A)?
All taxpayers are allowed to file the updated returns whether they filed the original return or belated return or revised return or not. This will provide an opportunity for the taxpayers to file the correct tax return only if the tax liability is payable within the extended period of 24 months from the end of the relevant assessment year.
Updated returns should be accompanied by proof of tax payment instructed in section 140B. However, you need to keep in mind that the updated returns can not be revised again so updated returns under this section can be filed only once for an assessment year. Although there are certain conditions, an updated return can not be filed under section 139 (8A). To know more about it, Read on!!
Updated returns can not be filed u/s 139 (8A) in some cases
All persons including HUF, Firms/LLP, Companies, AOP, BOI, etc are eligible to file Updated returns under section 139(8A). But sometimes the updated return can not be filed in the below-mentioned situations-
In case it is showing a return of loss
In case it has the effect of reducing the tax liability or increasing the refund.
In case either an assessment is pending or completed.
In case the Assessing Officer has the details about the assessee under some prescribed acts.
In case any survey has been conducted under section 133A.
Prescribed Time for updated returns as per section 139(8A)
The time limit for filing updated returns is 24 months years from the end of such an appropriate assessment year.
The last date to file an updated return is 31st March 2023 - A.Y. 2020-21 (F.Y. 2019-20).
The last date to file an updated return is 31st Mar 2024 - A.Y. 2021-22 (F.Y. 2020-21).
The due date to file an updated return is 31st Mar 2025 - For AY 2022-23 (FY 2021-22).
Additional Tax/Penalty for filing Updated Returns u/s 139 (8A)
There is a fee defined while filing the updated returns. The penalty for filing updated returns is as follows-
If you file updated returns within the 1 year from the end of the suitable assessment year. The penalty of 25% of the average tax and interest payable on filing of updated return is to be levied.
If you choose to file updated returns between 1 year to 2 years from the end of the relevant assessment year. A penalty of 50% of the average tax and interest payable for filing an updated return is to be levied
Required Details are to be filed in Form ITR-U
The income tax department has introduced Form ITR-U for filing updated returns under section 139(8A). The following are the details for filing the ITR-U form except for the general information.
The first is to ensure that you are eligible to file the updated returns as per the rules and regulations mentioned in the first, second, and third provisions of section 139 (8A).
Secondly, you have to choose a relevant ITR form Such as ITR-1,2,3,4,5,6 for filing updated returns.
Thirdly, select the reasons for updating the income,
If income is not reported correctly
If previous returns are not filed
In case of wrong tax rates
If wrong income sources
Reduction of carried forward loss
Others
Select the period during which you are filing updated returns
1 year from the end of the suitable assessment year.
Calculate total payable tax for updated returns
The total tax liability should be calculated as per the provisions (Section 140B) of the I-T Act as follows:-
Particulars
Amount
Tax payable (On additional income according to adjusted ITR)
XXXX
Interest levied on additional income (if any under Section 234A/234B/234C)
XXXX
Late fee (if any under Section 234F)
XXXX
Taxes paid or relief TCS/TDS//Advance Tax/regular assessment tax
XXXX
Total refund issued claimed as per the original return
XXXX
Aggregate tax liability on additional income
XXXX
Additional tax 25% to 50%
XXXX
Total Amount Payable
XXXX
How to rectify the updated returns?
Updated returns can be rectified only through a Digital Signature Certificate (DSC) in tax audit cases and the filing of returns by a political party.
The alternative option is to verify through the electronic verification code (EVC), which is given for non-tax audit cases.