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CBDT Notifies New Form ITR-U & Rule 12AC for Furnishing Updated Return of Income

Written by Editorial Board 2022-04-30 1026

The Finance Act 2022 has inserted a new section 139(8A) in the Income Tax Act, w.e.f. 1.4.2022, enabling the furnishing of an updated return of income, within a period of two years from the end of the relevant assessment year.

The Apex Body CBDT vide its Notification No. 48/2022 dated 29.4.2022, has inserted a new Rule 12AC in the Income Tax Rules, 1962. This new Rule 12AC provides that the updated return of income u/s 139(8A) of the Income Tax Act, can be filed for assessment year 2020-21 and subsequent assessment years. The Rule further provides that such an updated return shall be furnished in the Form ITR-U, along with the respective originally applicable ITR Forms 1- 7 (as the case may be), and be verified in the manner indicated as under:

S.No.	Types of Persons	Manner of furnishing an Updated Return
1.	All Corporate Entities, Political Parties & Non-Corporate Persons like Individuals, HUF, Firm, LLP, AOP, BOI, Local Authority & Artificial Judicial Persons, whose accounts are required to be audited u/s 44AB of the Income Tax Act.	Electronically under Digital Signature
2.	Non-Corporate Persons like Individuals, HUF, Firm, LLP, AOP, BOI, Local Authority & Artificial Judicial Persons, whose accounts are not required to be audited u/s 44AB of the Income Tax Act, and Charitable Trusts & Institutions, Educational Institutions & Medical Institutions registered u/s 12AA/12AB/10(23C)	Electronically under Digital Signature Or Electronically through Electronic Verification Code (EVC)

The Specified Reasons for furnishing an Updated Return of Income in the New Form ITR- U are as under:

o Return previously not filed

o Income not reported correctly

o Wrong heads of income chosen

o Reduction of carried forward loss

o Reduction of unabsorbed depreciation

o Reduction of tax credit u/s 115JB/115JC

o Wrong rate of tax

o Others

Payment of Additional Tax

An updated return under newly inserted section 139(8A) of the Act, can be furnished only with the payment of additional tax of 25% or 50%, as the case may be before filing of such updated return. If the updated return is filed after the expiry of available time period for filing belated or revised return but within 12 months of the end of the relevant assessment year, then an additional tax of 25%, is required to be paid.

However, if the updated return is filed after 12 months but within 24 months from the end of relevant assessment year, then an additional tax of 50%, is required to be paid.

Manner of Computation of Total Updated Income

The manner of Computation of Total Updated Income and Tax Payable is specified in Part B of the new Form ITR-U as under:

PART B – ATI COMPUTATION OF TOTAL UPDATED INCOME AND TAX PAYABLE
1.	A	Head of income under which additional income is being returned as per Updated Return	Amount in Rs
		Head of income (If yes, Please specify additional income)
	a	Income from Salary
	b	Income from House Property
	c	Income from Business or Profession
	d	Income from Capital gains
	e	Income from other Sources
	f.	Total additional income (a+b+c+d+e)
	B.	Total income as per last valid return (only in cases where the Income Tax Return has previously been filed)
2.		Total income as per Part B-TI (Please see instruction)
3.		Amount payable, if any (To be taken from the ―Amount payable‖ of Part B-TTI
		of the updated ITR) (Please see instruction)
4.		Amount refundable, if any (To be taken from ―Refund‖ of Part B-TTI of the updated ITR) (Please see instruction)
5.		Amount payable on the basis of last valid return (only in applicable cases)
6.		(i) Refund claimed as per last valid return, if any (Please see instruction)
		(ii) Total Refund issued as per last valid return, if any (including interest u/s 244A received) (Please see instruction)
7.		Fee for default in furnishing return of income u/s 234F
8.		Regular Assessment Tax, if any (in applicable cases)
9.		Aggregate liability on additional income,
		(i) in case refund has been issued [3 + 6ii- (5 + 8)])
		(ii) in case refund has not been issued [3 + 6i – (5+8)]
10.		Additional income-tax liability on updated income [25% or 50% of (9-7)]
11.		Net amount payable (9+10)
12.		Tax paid u/s 140B
13.		Tax due (11-12)

14.

TAX PAYMENTS (ONLY as per Updated Return)

Details of payments of tax on updated return u/s 140B

TAX PAID U/S 140B

Sl No

BSR Code

Date of Deposit

(DD/MM/YYYY)

Serial Number of Challan

Amount (Rs)

(1)

(2)

(3)

(4)

(5)

iii

NOTE

►

Enter the totals of tax paid u/s 140B at Sl. No.11 of Part B-ATI

TAX PAYMENTS

Details of payments of Advance Tax / Self-Assessment Tax / Regular Assessment Tax, credit for which has not been claimed in the earlier return (credit for the same is not to be allowed again under section 140B(2) )

ADVANCE/SELF ASSESSMENT/ REGULAR ASSESSMENT TAX

Sl No

BSR Code

Date of Deposit

(DD/MM/YYYY)

Serial Number of Challan

Amount (Rs)

(1)

(2)

(3)

(4)

(5)

Iii

NOTE

►

Credit for above is not to be allowed again under section 140B(2)

Cases where Updated Return of Income can’t be filed:

If the updated return is a return of loss or it results in decrease in the tax liability or increases the tax refund.
In cases of Search, Survey & Seizure.
In cases where assessment notice u/s 143(2) or reassessment notice u/s 148, for such assessment year has already been issued or where assessment or reassessment proceedings have been initiated and are pending.
In cases where assessment or reassessment is already completed.
In cases where AO has information about the assessee under Prevention of Money Laundering Act, 2002, The Black Money (Undisclosed Foreign income & Assets) & Imposition of Tax Act, 2015, The Prohibition of Benami Property Transactions Act, 1988.

Understanding Practical Utility of Furnishing of An Updated Return of Income

We can file our revised return u/s 139(5) of the Act, within a period of 3 months prior to the end of the relevant assessment year only, but now we can file our updated return within a period of two years from the end of the relevant assessment year. So, this new provision effectively provides us an extra time period of 2 years and 3 months, for correcting our omissions.

Let us understand this with an example.

For financial year 2022-23 and assessment year 2023-24, an individual or HUF can file its original return by 31.7.2023, if there is no extension. After filing of this original return, if such person realises that he/she has skipped showing some income in his/her original return, then he/she can file the revised return u/s 139(5) incorporating any such missed income up to 31.12.2023 only, i.e., at least three months prior to the end of relevant assessment year 2023-24.

However under the newly inserted section 139(8A) of the Act, such person has the option of furnishing the updated return including the skipped income or omissions up to 31.03.2026, that is, within two years from the end of relevant assessment year 2023-24. Therefore this new provision of furnishing of updated return u/s 139(8A) of the Act, allows such person an extra time period of two years and three months, to rectify his/her omissions and furnish an updated return of income.

Such an Updated Return of Income u/s 139(8A) can be furnished only one time for an assessment year.

Useful Reference

The CBDT Notification No. 48/2022 dated 29.4.2022 specifying the new Rule 12AC and the new Form ITR-U for furnishing of an updated return of income for AY 2020-21 and subsequent assessment years is enclosed as per PDF file below, for ready reference of our Readers.

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CBDT Notifies New Form ITR-U & Rule 12AC for Furnishing Updated Return of Income