Are you one of those taxpayers who missed the deadline for filing your Income Tax Return (ITR) for the previous year? Don’t worry, you’re not alone. Many people face this situation for various reasons, like busy schedules, forgetfulness, or a lack of awareness.
The good news is that the Income Tax Department allows taxpayers to file their returns using ITR-U even after the deadline. The Updated Income Tax Return or ITR-U form, lets you correct mistakes or omissions in your previously filed ITR. And, you have up to two years from the end of the relevant assessment year to submit it.
This form was introduced by the Indian government in the Fiscal Budget of 2022. However, it’s important to understand the consequences of late filing and the steps involved in the process.
In this blog post, we’ll guide you through filing your previous year’s ITR, even if you’re late. We’ll also discuss the penalties and interest charges you may have to pay for late filing.
So, if you’re feeling stressed about your late ITR, relax and read on. We’ve got you covered!
Understanding ITR-U
ITR-U, also known as the Updated Income Tax Return, allows taxpayers to correct errors or add missed information in their ITRs. It also provides a chance to file an ITR if you missed the original deadline and the belated return window.
With ITR-U, you have two years from the end of the assessment year to make these updates. For example, if you missed filing for the 2023-24 assessment year by 31 March 2024, you can still file an ITR-U up to 31 March 2026.
Section 139(8A) of the Income Tax Act introduced ITR-U to make tax compliance easier. This form lets taxpayers voluntarily correct their returns without facing legal consequences. The ITR-U filing for the 2023-24 assessment year began on 1 January 2024.
Who Should File ITR-U?
If you’ve made a mistake or missed income details in a previously filed tax return, you might need to file an updated return, known as ITR-U. This option helps correct errors and disclose income accurately.
- Original Return: If your initial tax return had errors or omissions such as not reporting crypto gains or crypto income, you can update it with ITR-U.
- Belated Return: If you filed a delayed return and realised details were missing, you can use ITR-U to correct it.
- Revised Return: Even if you previously revised your return but still missed something, ITR-U allows for further updates.
Who Is Not Eligible For ITR-U?
Not everyone qualifies to file the updated income tax return (ITR-U). Specific conditions restrict taxpayers from using this form to update their returns.
- Already Filed Updated Return: Taxpayers who have already submitted an updated return under section 139(8A) for a particular assessment year cannot file ITR-U again for the same year.
- Nil or Loss Returns: Individuals reporting nil income or a loss in their tax return are not eligible to file an ITR-U.
- No Additional Tax Liability: If adjustments, such as TDS credits or loss offsets, nullify additional tax liability, ITR-U cannot be filed.
- Interventions by Tax Authorities: ITR-U is not allowed if tax authorities are conducting or have completed searches, surveys, or asset requisitions under relevant sections.
- Pending or Completed Assessments: If any assessment, reassessment, revision, or re-computation is ongoing or completed, ITR-U filing is restricted.
- Claims for Higher Refund: ITR-U cannot be used to claim an increase in refund amounts.
Note: If any carried-forward loss, unabsorbed depreciation, or tax credit needs adjustment in a later year due to filing an updated income return, an updated return must be submitted for each following year affected by this change.
When Should You File ITR-U?
Filing an updated Income Tax Return (ITR-U) helps you correct or complete your tax filing if you missed or made errors in previous submissions. Here are situations when filing ITR-U can be beneficial:
- Missed Original Filing Deadline: If you missed both the original and belated filing deadlines, you can still file an updated return with ITR-U.
- Incorrect Income Declaration: If you discovered undeclared income such as income from mining or staking crypto after filing, use ITR-U to report it and avoid penalties.
- Incorrect Income Head: If you selected the wrong income category initially, you can use ITR-U to correct it.
- Incorrect Tax Rate: Mistakenly paid tax at a lower or higher rate? Filing an ITR-U allows you to adjust the rate accurately.
Adjust Losses and Deductions: If you need to reduce carried forward losses, unabsorbed depreciation, or tax credits (under sections 115JB/115JC), you can file ITR-U to amend them.
Note: You can file only one updated return per assessment year, so make sure all changes are accurate before submitting.
Time Frame To File ITR-U
You have up to 24 months from the end of the relevant assessment year to file the ITR-U. For instance, the deadline to submit ITR-U for AY 2022-23 is 31st March 2025, while for AY 2024-25, the last date is 31st March 2027.
The table below shows the filing deadlines for the past three years:
|
Assessment Year |
Last date to file ITR-U |
|
AY 2022-23 (FY 2021-22) |
31st March 2025 |
|
AY 2023-24 (FY 2022-23) |
31st March 2026 |
|
AY 2024-25 (FY 2023-24) |
31st March 2027 |
Contents Of An ITR-U Form
Filing an ITR-U form lets you update your income tax return if you missed or misreported any information in your original filing. The process involves submitting an updated ITR form along with the ITR-U form, ensuring your details and tax dues are accurate. Here’s a step-by-step breakdown to guide you.
Part A: General Information
- PAN and Name: Start by entering your Permanent Account Number (PAN) and full name.
- Aadhaar Number and Assessment Year: Provide your Aadhaar card number and select the relevant assessment year.
- Previous Filing Status: Indicate if you previously filed a return for the selected assessment year.
- Original Filing Section: If you filed the return before, refer to your ITR acknowledgement to check the section under which it was filed (e.g., Section 139(1)).
- Acknowledgement Details: Input the form number, acknowledgement or receipt number, and filing date (in DD/MM/YYYY format) from your original return.
- Eligibility Check: Review the eligibility conditions and select the appropriate option that applies to your updated return.
- ITR Form Number: Choose the ITR form you are updating (e.g., ITR-1 to ITR-7).
- Reason for Update: You must select at least one reason for updating the ITR-U form. You can choose multiple reasons if needed.
- Time Elapsed Since Original Filing: Select either “12-24 months” or “up to 12 months” based on when you filed your original return.
- Adjustments for Losses or Depreciation: If your update affects carried-forward losses or unabsorbed depreciation, specify the affected assessment year and whether a revised or updated return was previously filed.
Part B: ATI – Computation of Total Updated Income and Tax Payable
- Additional Income: Add any extra income across each head without needing a detailed breakdown.
- Last Declared Income: Mention the income figure from your last return.
- Total Income: Refer to “Part B-TI” in your original ITR form to find your total income.
- Payable Amounts: Check Part B-TT in the ITR form for any amount payable or refundable from your last return.
- Tax and Refund Amounts: Enter the tax payable or refund amount from your last return. If you claimed or received a refund, include the refund and interest received.
- Late Filing Fee: If you filed the previous return late, enter the late filing fee you paid.
- Regular Assessment Tax: Mention any regular tax paid during the last filing.
- Additional Tax Liability: Calculate extra tax on updated income, which could be 25% or 50% based on the delay period.
- Net Tax Payable: Sum the additional tax with the original tax amount for the net payable.
- Self-Assessment Tax (Section 140B): If additional tax is due, pay it as Self-Assessment Tax and include the challan details.
Do You Need To Pay Additional Tax When Filing ITR-U?
Yes, when filing an updated income tax return (ITR-U), you might need to pay an additional tax to correct unreported income. Along with this tax, a surcharge applies based on how long after the assessment year (AY) the ITR-U is filed.
Additional Tax and Surcharge
Filing an ITR-U involves calculating an extra tax liability on previously unreported income. But that’s not all. An additional surcharge applies to this extra tax, with the percentage depending on the timing of the ITR-U filing:
- Within 12 months from the end of the AY: A surcharge of 25% on the additional tax amount.
- Between 12 to 24 months from the end of the AY: A surcharge of 50% on the additional tax amount.
Example Calculation
Imagine Mr. Ajit finds that he owes an additional tax of INR 2,00,000 due to previously unreported income. He has two filing options for ITR-U:
- Within 12 months from the AY’s end: Mr. Ajit pays a 25% surcharge, or INR 50,000, making his total additional tax INR 2,50,000.
- Between 12 and 24 months from the AY’s end: Mr. Ajit faces a 50% surcharge, or INR 1,00,000, bringing his total additional tax to INR 3,00,000.
Important Considerations for Paying Additional Tax
Here are some additional points which you need to keep in mind while filing ITR-U Interest on Late Payment.
The additional tax also includes interest for delayed payment under Sections 234A, 234B, and 234C of the Income Tax Act. This interest, combined with the 25% or 50% surcharge, can significantly increase the final payable amount. Calculating these correctly is crucial to avoid further penalties or interest.
Using Challan 280
To make the payment, taxpayers need to use Challan 280, specifying the additional tax and interest before filing the ITR-U. Accurately filling in Challan 280 ensures a smooth payment process and avoids delays in processing.
Accurate Reporting in ITR-U
It is essential to double-check all amounts when filling out ITR-U to prevent errors. Precise calculations help avoid penalties and minimise the chance of questions from tax authorities. Accurate payment and reporting save taxpayers from further complications, ensuring a straightforward filing process.
How Can You File ITR-U Online?
Filing your ITR-U online helps you update any income information that was missed in your original income tax return. Here’s a step-by-step guide to make the process smooth and hassle-free.
Log in to the e-Filing Portal
Start by visiting the official income tax e-filing portal. Log in using your PAN as your user ID, ensuring you have all your login credentials handy.
Access the e-File Menu
Once you’ve logged in, locate the ‘e-File’ menu. Click on ‘File Income Tax Return’ to begin the process of filing your updated return.
Select the Assessment Year
Choose the relevant Assessment Year (A.Y.) for which you need to file the updated return. This ensures that your return reflects the correct period.
Choose Filing Type
When prompted, select ‘Updated Return u/s 139(8A).’ This option is specific for returns that are being updated to correct under-reported or unreported income.
Select Status
Choose your applicable status from the drop-down options, whether it’s Individual, HUF, Company, or any other category.
Fill in Income Details
Enter the income details that you previously missed or under-reported. Make sure you have all relevant documents ready, such as Form-16, bank statements, and investment proofs, for accurate entry.
Calculate and Pay Taxes
The portal will calculate any additional tax liability. Pay any outstanding tax along with applicable interest or penalties through the portal before submitting the form.
Preview and Submit
Carefully review your ITR-U form. Once you are satisfied with the entries, submit it to complete the process.
Verification and Acknowledgement
Verify your submission using Aadhaar OTP, EVC, or by mailing a signed ITR-V to the CPC in Bengaluru. Once verified, you’ll receive an acknowledgment, confirming successful filing. Retain this for your records.
How Can KoinX Help With Filing Your ITR-U?
Missed the ITR filing deadline? As a crypto investor in India, you may find the task of late tax filing overwhelming, especially with the additional complexities of crypto transactions. KoinX offers a range of tools to simplify your tax filing process, making it easier and stress-free.
Simplified Crypto Tax Calculation
KoinX automates the calculation of taxes on your crypto transactions, saving you from the hassle of tracking each trade or manually calculating your tax liabilities. It automatically records every crypto transaction and generates an accurate tax report, so you can file without any worries. This automation not only saves time but also ensures that every transaction is accurately documented, reducing the chance of errors in your filings.
Precise Schedule VDA Report Generation
The Schedule VDA report is essential for detailing your crypto activities. KoinX provides you with a precise Schedule VDA, ensuring your records align with current tax regulations. This report lists each crypto transaction in an organised format, helping you avoid misreporting or missing any crucial details. A well-prepared Schedule VDA minimises errors and helps you stay compliant with tax requirements.
Comprehensive Tax Filing Support
In addition to tax calculations, KoinX offers filing support through its tax bundle plans. You can connect with certified Chartered Accountants (CAs) who specialise in both regular and crypto tax filings. This support streamlines your filing process, as the CA guides you through every step and addresses any concerns about late filing or complex transactions.
Ready to make your tax filing easier? Try KoinX today and experience seamless crypto tax management
Conclusion
Filing your past ITR might seem daunting, especially when cryptocurrencies are involved. However, with the right approach and understanding of the tax laws, it can be a smooth process.
Remember, it’s always better to file your taxes on time to avoid penalties. If you’ve missed the deadline, don’t panic. Follow the steps outlined in this blog to file your ITR accurately and efficiently.
Frequently Asked Questions
Can You Claim a Refund Using ITR-U?
No, you cannot use ITR-U to claim or increase a refund amount. ITR-U is specifically for updating tax filings, so it doesn’t support refund claims.
What If You’ve Already Filed an Updated Return for an Assessment Year?
You can only file ITR-U once per assessment year. If you’ve already filed an updated return for a specific year, you won’t be able to submit another ITR-U for that same period.
How Can You Pay Additional Tax When Filing ITR-U?
To pay any additional tax for ITR-U, use Challan 280 before filing. Enter the details of this payment in ITR-U during the filing process.
How Should You Calculate the Tax Payable for ITR-U?
Calculate your tax based on any additional income and necessary corrections. Don’t forget to add interest under Sections 234A, 234B, and 234C, and then include the additional tax of 25% or 50%, depending on your situation.
What If You Make an Error in a Filed ITR-U?
Once you’ve filed ITR-U, you can’t revise it. If you realize there’s an error after filing, consider reaching out to a tax expert to discuss any possible options for correcting it.
