ITR U – What is ITR-U Form and How to File ITR-U

Introduction

Filing income tax returns accurately is a key responsibility for taxpayers. However, mistakes or omissions can happen, leading to under-reported income, missed deductions, or even non-filing. To address such scenarios, the Income Tax Department introduced ITR U, a form allowing taxpayers to correct past mistakes voluntarily.

This article explains everything about ITR U, including the last date, penalties, how to file using the ITR U utility, and answers to frequently asked questions. Let’s dive into the details!

What is ITR U?

ITR U (Updated Return) is a provision under Section 139(8A) of the Income Tax Act that enables taxpayers to update their income tax returns for a particular assessment year, even after the due date has passed.

This form was introduced in the Union Budget 2022 to promote voluntary compliance and reduce litigation. Unlike revised returns (under Section 139(5)), which must be filed before the assessment year ends, ITR U extends the timeline significantly, giving taxpayers a window of 24 months to amend errors or omissions.

When Can I File ITR U?

You can file ITR U under the following circumstances:

1. Missed Reporting Income: Income left out during the original filing.
2. Incorrect Deductions or Exemptions: Wrong claims made during filing.
3. Non-Filing of ITR: If you completely missed filing the return.

ITR U Last Date for Filing

The deadline for filing ITR U is within 24 months from the end of the relevant assessment year (AY). Here’s a breakdown:

• For AY 2023-24: The last date to file ITR U is March 31, 2026.
• For AY 2022-23: The deadline is March 31, 2025.

Why File ITR U Early?

Filing sooner reduces your penalties and interest liabilities. Delays can also increase the financial burden due to additional taxes under Sections 234B and 234C.

ITR U Penalty

Filing an ITR U form comes with an additional penalty known as the “additional tax liability.” The penalty depends on how late you file:

1. Within 12 Months: You must pay 25% of the additional tax liability as a penalty.
2. Beyond 12 Months (Up to 24 Months): The penalty increases to 50% of the additional tax liability.

ITR U Penalty Calculation Example:

• Taxable Income Omitted in Original ITR: ₹2,00,000.
• Applicable Tax Liability: ₹40,000.
• Filing Within 12 Months: Additional penalty = ₹40,000 × 25% = ₹10,000.
• Filing Beyond 12 Months: Additional penalty = ₹40,000 × 50% = ₹20,000.

Important Note: Interest under Sections 234B and 234C is also applicable on the unpaid tax liability.

How to File ITR U? A Step-by-Step Guide

Filing ITR U requires the use of the ITR U utility, a tool provided by the Income Tax Department. Follow these steps for a hassle-free filing process:

Step 1: Log In to the e-Filing Portal

Visit the Income Tax e-Filing Portal and log in using your PAN, Aadhaar, or other credentials.

Step 2: Select ITR U Form

Navigate to the “File Returns” section, select the relevant assessment year, and choose the ITR U form.

Step 3: Provide Reasons for Filing ITR U

You must specify the reason for filing, such as:

• Income not reported in the original return.
• Wrong deductions/exemptions claimed.
• Return not filed earlier.

Step 4: Enter Updated Income Details

• Add any omitted income or correct errors in deductions.
• Use the ITR U utility to calculate the updated tax liability, penalty, and interest.

Step 5: Pay Taxes

• Generate a challan and pay the calculated tax, including penalties.
• Upload the payment details in the ITR U form.

Step 6: Submit and Verify

• After completing the form, submit it online.
• Verify the return using Aadhaar OTP, net banking, or other available options.

Features of the ITR U Utility

The ITR U utility simplifies the process of filing updated returns by providing:

1. Pre-Filled Information: Auto-fetches data from previous filings.
2. Error Identification: Flags inconsistencies in the return.
3. Automatic Tax Calculation: Computes additional taxes, penalties, and interest.
4. User-Friendly Interface: Step-by-step guidance for filing.

Benefits of Filing ITR U

1. Voluntary Compliance: Avoid notices and penalties by rectifying past mistakes.
2. Legal Protection: Filing ITR U shields you from prosecution for non-disclosure of income.
3. Extended Deadline: A generous 24-month window allows taxpayers to correct errors.
4. Maintain Clean Records: Update your return to ensure compliance and avoid disputes.

Limitations of ITR U

While ITR U is a powerful tool, it has certain limitations:

1. No Refund Claims: You cannot use ITR U to claim additional refunds.
2. No Reduction in Tax Liability: Returns showing lower tax liability cannot be filed under ITR U.
3. Not Applicable in Certain Cases:
   • Returns involving undisclosed foreign assets.
   • Cases where assessment proceedings are already completed.

Common Mistakes to Avoid When Filing ITR U

1. Delaying Filing: Penalties increase over time, so file as early as possible.
2. Incorrect Details: Double-check income and tax details before submission.
3. Ignoring Interest: Include interest under Sections 234B and 234C in your calculations.

FAQs on ITR U

1. What is ITR U?

ITR U is an updated return form under Section 139(8A) that allows taxpayers to correct errors or omissions in their previously filed income tax returns.

2. Who can file ITR U?

Any taxpayer who has missed reporting income, claimed incorrect deductions, or failed to file an ITR can file ITR U.

3. What is the last date for filing ITR U?

The last date is 24 months from the end of the relevant assessment year. For AY 2023-24, the deadline is March 31, 2026.

4. What is the penalty for filing ITR U?

Penalties range from 25% to 50% of the additional tax liability, depending on when you file.

5. Can I use ITR U to claim refunds?

No, ITR U cannot be used to claim additional refunds or reduce tax liabilities.

6. Is interest applicable on ITR U filings?

Yes, interest under Sections 234B and 234C is applicable on unpaid taxes.

7. Can I file ITR U for multiple years?

Yes, you can file ITR U for any assessment year within the 24-month window.

Final Thoughts on ITR U

The ITR U form is a game-changer for taxpayers, offering a lifeline to rectify past mistakes without fear of severe consequences. By understanding its features, penalties, and filing process, you can ensure compliance and maintain a clean tax record.

Don’t wait until the ITR U last date—file early to minimize penalties and safeguard your financial future.