Updated Income Tax Return

Updated Return, Income Tax

Finance Act, 2022 introduced the concept of furnishing income tax returns i.e. ‘Updated Return’ for offering additional income to tax subject to payment of additional income tax. For this purpose, section 139(8A) is inserted in the Income Tax Act to provide for furnishing Updated Return of Income in the prescribed form and manner and shall contain prescribed particulars.

The CBDT has now notified Rule 12AC and new Form ITR-U for filing of such updated return of income vide the Income-tax (Eleventh Amendment) Rules, 2022.


Eligibility for Filing Form ITR-U:  

Persons eligible to update returns for FY 2019-20 and subsequent assessment years as per newly inserted section 139 8(A) of the act, are:

  • any person, who has furnished his original return of income, or
  • furnished belated return, or
  • furnished revised return

can now furnish an updated return in case of any omission or wrong statement in his earlier return of income by such person.

Who cannot file the updated return?

If search or survey or prosecution proceedings are initiated against the taxpayers for the relevant assessment year, they cannot file the updated return. Moreover, the taxpayer cannot file an updated return even if assessment/reassessment/revision/re-computation is pending or completed for the relevant assessment year.

Also, the Act does not allow the taxpayer to file the updated return if there is no additional tax outgo. Hence, if the total tax liability is to be reduced, losses to be adjusted against the income, there is a refund or increase in the refund amount, the taxpayers cannot file.


Period for Filling:

The time limit provided for filing an updated return is 24 months from the end of the relevant assessment year. For the current financial year 2022-23, a person can file an updated return for AY 2020-21 and AY 2021-22.


What are the penalties for filing an updated return?

  • If you file the updated return within 12 months of the end of the relevant assessment year, you will be liable to pay a penalty equivalent to 25% of the tax and interest payable.
  • If you do file the updated return between 12 and 24 months of the end of the relevant assessment year, the penalty will increase to 50%.


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