Updated Return u/s 139(8A)


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As a step towards achieving the Tax certainty, the Finance Bill 2022 has introduced the new provisions vide Section 139(8A) of the Income Tax Act enabling the tax payers to file the Updated Return subject to certain conditions which will come into effect from 01.04.2022.

This article gives you an idea of what the Updated Return is under the Income Tax Act 1961, for which the Form U is recently notified by CBDT.

Applicability/Eligibility to file the Updated Return:

  • Omission or error in filing the original return/ Belated return/Revised return.
  • And such omission or error results in disclosure of additional income and there by additional Income tax liability.
  • And such return needs to be filed within 2 years from the end of such relevant Assessment year.

For Example:

For FY 2019-20, the updated return can be filed on or before 31st March, 2023

(That is within 2 years from the end of the assessment year 2020-21)

  • This updated return can be filed from FY 2019-20.

However while filing the Form U, the taxpayers need to give the exact reason for updating the income. The following are such reasons which are required to be selected by the assessee.

  • Return previously not filed
  • Income not reported correctly
  • Wrong heads of income chosen
  • Reduction of carry forward loss
  • Reduction of unabsorbed depreciation
  • Reduction of tax credit u/s 115JB/115JC
  • Wrong rate of tax
  • Others

Penalty/Additional Tax payable:

If updated return is filed

  • within 12 months from the end of the relevant assessment year , the additional tax/ penalty is 25% of such computed tax and interest
  • between 12 months to 24 months from the end of relevant assessment year, the additional tax/ penalty is 50% of such computed tax and interest

This levy of additional tax is over and above the regular Income tax and Interest

Updated Return cannot be filed in the following cases:

  • If it has the effect of showing a loss
  • Resulting in refund
  • Reducing the tax liability which was previously determined
  • Has the effect of increasing the refund
  • If the updated return is furnished for the relevant assessment year
  • Any proceeding for assessment or reassessment or recomputation or revision of income under Income Tax is pending or has been competed for the relevant assessment year.
  • The Assessing Officer has information in respect of such assessee for the relevant assessment year in his possession under Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 or the Prohibition of Benami Property Transactions Act, 1988 or the Prevention of Money Laundering Act, 2002 or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and the same has been communicated to him, prior to the date of furnishing of return
  • If the information for the relevant assessment has been received under an agreement referred to in sections 90 or 90A of the Act in respect of assessee and the same has been communicated to him, prior to the date of furnishing of return
  • any prosecution proceedings under the Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of furnishing of return
  • He is such a person or belongs to such class of persons, as may be notified by the Board in this regard

Filing the updated return may provide the taxpayer the following benefits:

  • Avoid penal consequences for the under reporting of income identified during the assessment or reassessment proceedings
  • Relief from further prosecution proceedings and thereby providing the opportunity to reduce the litigation.

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