ITR Filing: Know the conditions when you cannot file an updated Income Tax Return

Filing income tax return (ITR) is one of the most important responsibilities of any taxpayer in the country. If you have missed the July 31 deadline to file your ITR for the financial year 2022-23, there are still some options you can explore. One is a belated return, wherein taxpayers can submit their returns with late fees. Another option is an updated return. This can be filed regardless of whether an individual has filed ITR previously for the relevant assessment year.

Take a look at the basic concept of updated return and who can, and cannot file it.

What is an updated return?

Updated return or ITR-U was introduced in the Union Budget 2022. The provision allows for the filing of an updated ITR by any person irrespective of the fact they have already filed an original, revised or belated return for the relevant financial year. It is imperative to note that the facility extends the ITR filing window to 24 months after the end of the relevant assessment year.

If the ITR-U is filed within one year from the end of the relevant assessment year, an extra 25 per cent amount on tax liability and interest will be charged. If the return is submitted between one and two years, the amount increases to 50 per cent.

Incorrect disclosure of income in the updated return can incur a penalty.

Updated returns can be filed in the following cases:

• The income has been declared incorrectly
• Wrong head of income chosen in ITR
• Tax was deposited at the wrong rate
• To reduce the carried forward loss
• To reduce unabsorbed depreciation
• To reduce the tax credit u/s 115JB/115JC

Who cannot file ITR-U?

Updated returns cannot be filed in following cases:

• Updated return is already filed. An individual can file only one ITR-U per assessment year.
• For filing loss return/ nil return
• For claiming/enhancing the ITR refund amount
• When updated return shows lower tax liability
• When search proceeding u/s 132 has been initiated against the taxpayer
• A survey is conducted u/s 133A
• Documents, books, or assets are seized/called by the Income Tax authorities u/s 132A.
• Assessment/ revision/reassessment/re-computation is pending or completed.
• There is no additional tax outgo, meaning the tax liability has been adjusted with TDS losses/ credit and there is no additional liability.

How to file ITR-U?

• Visit the Income Tax Department website, incometaxindia.gov.in.
• Choose the ITR-U form on the website.
• Enter the general information like PAN, Aadhaar and relevant assessment year.
• Choose the reason for filing ITR-U.
• Enter the additional income in each head of Income.
• If a refund was claimed, enter the amount.
• If the ITR was filed late, enter the amount paid for the same.
• If updated ITR results in a payable tax amount, make the payment as Self-Assessment Tax and enter the challan details.
• Verify the return using the process mentioned on the Income Tax Department’s website.