Section 139 (8A) of the Income Tax Act, 1961 allows taxpayers to correct errors in previously filed income tax returns (ITRs) by filing an updated ITR. It aims to optimise tax compliance without resorting to legal actions. As of March 17, 2024, direct tax collection rose by around 20 per cent to Rs 18.90 lakh crore from the previous year. The government expects tax collection to increase to Rs 19.45 lakh crore in FY2024-25, reported PTI.

The government has brought several tax reforms, including updated ITR filing and digitalisation, to boost transparency and increase tax collection. Section 139 (8A) was introduced in 2022 to allow taxpayers to file a revised income tax return (ITR-U).

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What Is ITR-U?

Updated ITR or ITR-U is an ITR form provided under Section 139 (8A) of the Act. ITR-U can be filed within two years from the end of the assessment year for which the return was filed. For instance, ITR-U must be filed by March 31, 2024, for the assessment year FY2021-22. Similarly, for the assessment year 2023-24,ITR-U must be filed by March 31, 2026.

Taxpayers can file ITR-U for original, belated, or revised returns. But remember, ITR-U can be filed only once for each assessment year, providing proper reasons for an updated return.

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When Can ITR-U Be Filed?

ITR-U can be filed for the following reasons:

• Wrong declaration of income
• ITR not filed previously
• Wrong selection of the income head
• Less amount paid based on the wrong tax rate
• To reduce the carried forward losses
• To reduce unabsorbed depreciation
• To reduce tax credit under sections 115JB and 115JC

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Additional Tax, But No Penalty:

ITR-U will attract an additional 25-50 per cent tax and interest without penalty. The tax rate depends on when the updated return is filed. It is 25 per cent if ITR-U is filed within 12 months from the end of the relevant assessment year and 50 per cent if it is filed after 12 months but before 24 months from the end of the relevant assessment year.

How To File An Updated Return On The E-Filing Portal?

Step 1: On the income tax official website’s homepage, click the ‘Download’ option and then click ‘Income tax return’ on the left side of the page.

Step 2: Select the relevant assessment year from the drop-down list.

Step 3: Select the ITR form relevant for the taxpayer and click ‘Utility Excel Based’. The Excel file will be downloaded to your system.

Step 4: Go to the download folder on your computer, open the downloaded file, fill in the details, validate, and create the JSON file.

Step 5: Log in to the income tax e-filing portal, select the ‘E-file’ option, click ‘Income Tax Return’, and then on ‘File Income Tax Return’.

Step 6: On the new page, select the assessment year, select ‘139(8A)-Updated Return’ from the return type, and choose the ITR type.

Step 7: Click the upload button to upload the offline JSON file. Once uploaded, select the verification method, verify the ITR, and submit.

After submission, one cannot change it. Download the receipt for a record of the ITR acknowledgement number.