Finance

Published: Mar 31, 2023
Updated: Mar 31, 2023

How to File an ITR-U Form to Rectify Income Tax Return Mistakes

Have you made mistakes or forgotten to report income in your income tax return? Don't worry, the Income Tax Act provides an opportunity for taxpayers to rectify their mistakes by filing an updated return, also known as an ITR-U form. In this article, we will cover everything you need to know about the ITR-U form, including who can file it, when to file it, and how to do it.

What is an ITR-U Form?

An ITR-U form is a form that allows taxpayers to update their income tax return by rectifying any errors or omissions made within two years from the end of the relevant assessment year. The ITR-U form was introduced in the Union Budget of 2022 to encourage tax compliance among taxpayers and avoid legal actions.

Who is Eligible to File an ITR-U Form?

Any taxpayer who has made mistakes or omitted certain income details in their original, belated, or revised returns can file an ITR-U form to update their return. Some common reasons for filing an ITR-U form include incorrect declaration of income, choosing the wrong head of income, paying tax at the wrong rate, and reducing carried forward loss or unabsorbed depreciation.

However, there are certain cases where a taxpayer is not eligible to file an ITR-U form. This includes situations where an updated return has already been filed, when filing a nil or loss return, claiming or enhancing a refund amount, or when search proceedings or surveys have been initiated against the taxpayer.

How to File an ITR-U Form?

To file an ITR-U form, you must download the form from the official income tax department website. Fill in the necessary details, such as PAN, assessment year, and tax calculation, and submit the form online. Remember to pay any additional tax liabilities that may arise from filing an ITR-U form.

When to File an ITR-U Form?

The time limit for filing an ITR-U form is within 24 months from the end of the relevant assessment year. For example, for the assessment year 2020-21, you can file an ITR-U form until the end of the financial year 2022-23, which is 31st March 2023.

Additional Tax Liabilities for Filing an ITR-U Form

If you file an ITR-U form within 12 months from the end of the relevant assessment year, you will have to pay an additional tax of 25% of the tax amount, along with interest. If you file an ITR-U form after 12 months but within 24 months from the end of the relevant assessment year, you will have to pay an additional tax of 50% of the tax amount, along with interest.

Rectify your errors soon through ITR U

Filing an ITR-U form is an excellent opportunity for taxpayers to rectify any mistakes made in their income tax return. As long as you file the form within the specified time limit and pay any additional tax liabilities that may arise, you can avoid legal actions and maintain good tax compliance.