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Form ITR-U Notified for furnishing Updated Return under section 139(8A) and Rule 12AC

form-itr-u-notified-updated-return-section-139-8a-and-rule-12ac

CBDT vide Notification No. 48/2022 dated 29.04.2022 in G.S.R. 325(E) through Income-tax (Eleventh Amendment) Rules, 2022 notified Rule 12AC for furnishing Updated Return of Income in Form ITR-U (ITR for updated return) as per the provisions of section 139(8A) of the Income-tax Act, 1961 (Act).


The updated return of income can be filed from the assessment year 2020-21 and onwards. Form ITR-U (ITR for updated return) shall be required to be filed along with the respective ITR forms.


Finance Act, 2022 introduced the concept of furnishing a new return income to be called an ‘Updated Return’ for offering additional income to tax subject to payment of additional income tax. For this purpose, section 139(8A) is inserted in the Act to provide for furnishing Updated Return of Income in the prescribed form and manner and shall contain prescribed particulars.



In this context, CBDT has prescribed Form ITR-U for furnishing Updated Return of Income under section 139(8A). A new Rule 12AC is also inserted in the Income-tax Rules, 1962 to prescribe the form ITR-U and its verification.


Further, the Updated return of income needs to be verified in the following manner-


Persons

Manner of Verification of ITR-U

Individual, or Hindu undivided family or a firm or limited liability partnership or an association of persons or a body of individuals, whether incorporated or not, or a local authority or an artificial juridical person in whose case accounts are required to be audited under section 44AB of the Act


Electronically under digital signature

Company or a political party

Other cases

Electronically under digital signature or

Through Electronic Verification Code (EVC)


Thus, a company or a political party or a person who is subject to compulsory tax audit u/s 44AB is required to furnish Updated Return of Income under DSC. In other cases, DSC is not mandatory and an updated return can be furnished with EVC or voluntarily with DSC.


It should be noted that in all cases updated return of income cannot be furnished. The following are cases when an updated return of income cannot be furnished-


1. Where a search has been initiated under section 132 or requisition is made under section 132A

2. Where a survey has been conducted u/s 133A other than survey u/s 133(2A)

3. Where any proceeding for assessment or reassessment or recomputation or revision of income is pending under the Act

4. Where the Assessing Officer has information for the relevant assessment year Blank Money law, Benami law, etc.

5. Where any information is received under an agreement referred to in sections 90 or 90A of the Act

6. Where any prosecution proceedings are initiated under the Act.


The Board is empowered to notify any other class of persons who shall be ineligible to file an updated return of income.


It should be noted that an updated return of income can be furnished only once for the relevant assessment year. Hence, one should be very careful in filing an updated return of income. There is no provision to revise the updated return.

 

The updated return of income can be filed within two years from the end of the relevant assessment year. As per Rule 12AC, the updated return of income can be furnished from Assessment Year (AY) 2020-21 and onwards.


The provisions of section 139(8A) related to the filing of an updated return of income have come into effect from 01.04.2022. Hence, in the financial year 2022-23, updated returns for AY 2020-21 and AY 2021-22 can be furnished.


Further, the person needs to pay an amount equal to 25% or 50% as additional income tax on the tax and interest due on the additional income furnished in the updated return of income. 


It should be pertinent to note that an updated return can be filed even by a person who has not filed any return of income under section 139 for the relevant assessment year. In case a person has already furnished a return of income then he can file the return only for disclosing additional income.


However, it should be noted that an updated return cannot be furnished for claiming loss or has the effect of decreasing the total tax liability or results in a refund or increasing the refund determined on the basis of the return furnished earlier under section 139 for the relevant assessment year.


The rationale for introducing the concept of furnishing an updated return of income is to provide an opportunity to the taxpayer to furnish a return of income due to omission or mistake in including the income reported in the Annual Information Statement (AIS)


The Income Tax Department has established a robust framework of reporting taxpayers' transactions. In this context, some taxpayers may realize that they have committed omissions or mistakes in correctly estimating their income for tax payment.


To provide an opportunity to correct such errors, a new provision permitting taxpayers to file an Updated Return on payment of additional tax is introduced.


It will further help in reducing the department’s interference and encourage voluntary compliance as the department will not be required to issue any notice requiring the taxpayer to file the return of income which otherwise is subject to interest and penalty.


In view of the introduction of sub-section (8A) of section 139, consequential amendments in section 144, section 153, section 234A and section 234B and 276CC have also been made. 


Further, a new section 140B is also inserted in the Act to provide for payment of additional tax in case of filing of updated return of income.


Read the full text of CBDT Notification 48/2022 dated 29.04.2022 on Prescribing Form ITR-U and Rule 12AC for furnishing Updated Return of Income


MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 29th April, 2022


G.S.R. 325(E).—In exercise of the powers conferred by sub-section (8A) of section 139 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:-


1. Short title and commencement.—(1) These rules may be called the Income-tax (Eleventh Amendment) Rules, 2022. 


(2) They shall come into force from the date of their publication in the Official Gazette. 


2. In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 12AB, the following rule shall be inserted, namely,–


12AC. Updated return of income.- (1) The return of income to be furnished by any person, eligible to file such return under the sub-section (8A) of section 139, relating to the assessment year commencing on the 1 st day of April, 2020 and subsequent assessment years, shall be in the Form ITR-U and be verified in the manner indicated therein. 


(2) The return of income referred to in sub-rule (1) shall be furnished by a person, mentioned in column (2) of the Table below in the manner specified in column (3) thereof:–

TABLE


Sl. No.

Person

Manner of furnishing return of income

(1)

(2)

(3)

1.

Individual, or Hindu undivided family or a firm or limited liability partnership or an association of persons or a body of individuals, whether incorporated or not, or a local authority or an artificial juridical person in whose case accounts are required to be audited under section 44AB of the Act or a Company or a political party required to furnish a return in Form ITR-7.

Electronically under digital signature.

2.

Individual, or Hindu undivided family, or firm, or limited liability partnership, or an association of persons or a body of individuals, whether incorporated or not, or a local authority or an artificial juridical person, or a person required to file a return under sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139, other than a person mentioned in column (2) of Sl. No. (1) above.

(A)  Electronically under digital signature;

(B)      Transmitting the data electronically in the return under electronic verification code.


Explanation.– For the purposes of this sub-rule, “electronic verification code” means a code generated for the purpose of electronic verification of the person furnishing the return of income as per the data structure and standards specified by Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems).


(3) The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the return in the manners specified in column (3) of the Table.’.


3. In the principal rules, in Appendix-II, after the ITR-Ack, the following Form ITR-U (ITR for updated return) shall be inserted, namely:-


FORM

 

 

ITR-U

INDIAN INCOME TAX UPDATED RETURN

[For persons to update income within twenty-four months from the end of the relevant assessment year]

(Refer instructions for eligibility)

(Please see rule 12AC of the Income-tax Rules, 1962)


……


[Notification No. 48/2022/F. No. 370142/18/2022-TPL(Part-1)] 

SHEFALI SINGH, Under Secy, Tax Policy and Legislation 


Note: The principal rules were published vide notification S.O. 969(E), dated the 26th March, 1962 and last amended vide notification GSR 309(E), dated the 22nd April, 2022.


Download CBDT Notification 48/2022 dated 29.04.2022 on Prescribing Form ITR-U and Rule 12AC for furnishing Updated Return of Income in PDF format


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