ITR Update: How can you file Pending ITRs of Last 2 Years; check details

Central Board of Direct Taxes (CBDT) has notified Updated return of income (“ITR-U“) for Assessment Year 2020-21 (Financial Year 2019-20) and 2021-22 (Financial Year 2020-21). [Read Notification]

What is the Updated return of income (“ITR-U”)?

The Taxpayers who were not able to Furnish or Revise Income Tax Return for AY 2020-21 or AY 21-22, have the opportunity to File Updated returns of income (“ITR-U”) for these Assessment Years.

What can be various Circumstances under which ITR-U will be filed?

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

Who is Eligible to File ITR-U?

Audit Cases

• 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.

Non-Audit Cases

• 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,

Other Cases

• 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.

ITR-U cannot be signed Physically and sent to Bangalore

• In the case of Audit Cases, ITR has to be signed Electronically under a digital signature.
• In other cases, ITR has to be signed Electronically under a digital signature or by electronic verification code.

Is there some Late Fees or Additional Tax I need to pay if I am filing ITR-U, as the timeline has already lapsed?

Extra Tax

If filed before completion of a period of twelve months from the end of the relevant assessment year:

• The additional tax, payable at the time of furnishing the return (ITR-U) shall be equal to 25% of the aggregate of tax

If Filed after the expiry of twelve months from the end of the relevant assessment year but before completion of the period of twenty-four months from the end of the relevant assessment year

• The additional tax, payable at the time of furnishing the return (ITR-U) shall be equal to 50% of the aggregate of tax

Interest & Late Fees

• Interest U/S 234A, 234B and 234C will be applicable.
• If no Return was filed Earlier, ITR Filing Late Fees will be applicable

Can I carry Forward the Loss in Updated Return?

As per the author’s Understanding, No loss can be carried forward if ITR was not filed earlier. However, in the case of revision of ITR, the loss can be carried forward. However, CBDT should provide some clarification in this regard.

Updated ITR is being filed Voluntary, means there was no Tax Liability: Do I need to pay Late Fees or Additional Tax?

As per the author’s Understanding, their should be no Late Fees or Additional Tax if “ITR-U” is being filed voluntarily, without any Tax Liability.