Section 139(8A) of the Income Tax Act provides a mechanism for taxpayers to file an Updated Return (ITR-U) within two years from the end of the relevant Assessment Year. This provision was introduced to facilitate voluntary tax compliance and minimize the risk of tax avoidance.
By filing an ITR-U, taxpayers can rectify errors, omissions, or incorrect reporting of income in their original tax return. This allows for the accurate calculation of tax liabilities and the prevention of potential penalties or legal action. It is important to note that ITR-U cannot be used to reduce tax liability, claim refunds, or increase losses. Its primary purpose is to ensure accurate reporting of income and tax payments.
This article will help you understand Section 139(8A) of the Income Tax Act, when you can file your income tax using this particular section and also how you can and cannot file an updated return under this section of the income tax.
Section 139(8A) allows taxpayers to update their returns, ensuring accurate reporting of income across different income tax slabs.
What is section 139(8A) of the income tax act?
Section 139(8A) of the Income Tax Act, 1961, is a provision that allows taxpayers to file an updated return if they have missed declaring certain income or need to correct errors in their original tax return. This section facilitates the filing of Form ITR-U, which is specifically designed for updated income tax returns. The provision enables individuals and entities to amend their returns beyond the initial deadlines provided under sections 139(1) for regular returns, 139(4) for belated returns, and 139(5) for revised returns. It is a crucial tool for ensuring that taxpayers can correct discrepancies and ensure accurate reporting of income and taxes.
What is ITR-U?
Section 139(8A) of the Income Tax Act provides taxpayers with an opportunity to update their Income Tax Return (ITR) within two years from the end of the financial year in which the original return was filed. The introduction of ITR-U aims to enhance tax compliance, allowing taxpayers to rectify omissions or errors in their returns without facing legal consequences.
For instance, if a taxpayer failed to file an ITR for the Assessment Year (AY) 2023-24 within the stipulated timeframe, including the belated return window, they can still utilize the ITR-U form to file their return. However, this must be done within two years from the end of the relevant assessment year. In the case of AY 2023-24, the ITR-U filing window commenced on January 1, 2024, and will conclude on March 31, 2026.
Who can file ITR-U under Section 139(8A)?
Individuals who have made errors or omissions in their income tax returns, including original returns, belated returns, or revised returns, are eligible to file an updated return.
Updated returns can be filed for the following reasons:
- Failure to file a return within the prescribed deadlines.
- Incorrect declaration of income.
- Selection of an inappropriate head of income.
- Payment of tax at the wrong rate.
- Reduction of carried forward losses.
- Reduction of unabsorbed depreciation.
- Reduction of tax credits under sections 115JB or 115JC.
It is important to note that only one updated return can be filed per assessment year.
When can you file an updated return under section 139(8A)?
Under Section 139(8A), taxpayers have the opportunity to file an updated return under the following circumstances:
- Eligibility for filing: Taxpayers can file an updated return regardless of whether they initially filed their return under section 139(1), submitted a belated return under section 139(4), or a revised return under section 139(5). This includes all types of taxpayers, including individuals, Hindu Undivided Families (HUFs), firms, Limited Liability Partnerships (LLPs), companies, and associations of persons (AOPs).
- Conditions for filing: The updated return can be filed only if the tax liability is settled within the extended period of 24 months from the end of the relevant assessment year. This means that the updated return should include proof of tax payment as instructed under section 140B.
- Limitations: Once filed, updated returns cannot be revised further. Therefore, Section 139(8A) permits only one opportunity to file an updated return for each assessment year.
Who is not eligible to file ITR-U u/s 139(8A)?
An Updated ITR-U cannot be filed in the following circumstances:
- Prior updated return: If an updated return has already been filed for the relevant assessment year.
- Nil or loss returns: To file a nil return or a return reporting a loss.
- Refund claims or enhancements: To claim or increase a refund amount.
- Reduced tax liability: If the updated return would result in a lower tax liability.
- Tax authority investigations: If a search proceeding under Section 132 or a survey under Section 133A has been initiated against you.
- Asset seizures or document calls: If books, documents, or assets have been seized or called for by the Income Tax authorities under Section 132A.
- Pending tax proceedings: If any assessment, reassessment, revision, or re-computation proceedings are pending or have been completed.
- No additional tax outgo: If there is no additional tax liability after adjusting TDS credits, losses, and other tax credits.
Important note: If filing an updated return would reduce the carry-forward of losses, unabsorbed depreciation, or tax credits for subsequent years, an updated return must be filed for each affected year.
The due date for filing ITR for AY 2025-26
For the Assessment Year (AY) 2025-26, the due date for filing an Income Tax Return (ITR) under Section 139(1) is 31st July 2025, unless extended by the government.
Many taxpayers assume that paying taxes alone fulfills their obligations. However, missing the ITR filing deadline can lead to legal consequences, including a late filing fee, which has been applicable since FY 2017-18 for returns filed after the due date.
ITR Filing Due Dates for AY 2025-26
Sr. No. |
Category of Taxpayer |
Due Date |
1 |
Individuals and entities not liable for tax audit |
31st July 2025 |
2 |
Taxpayers covered under tax audit (excluding transfer pricing cases) |
31st October 2025 |
3 |
Taxpayers covered under transfer pricing |
30th November 2025 |
4 |
Due date for revised/belated return for FY 2024-25 |
31st December 2025 |
ITR Filing Last Date 2025
The last date to file an Income Tax Return (ITR) for FY 2024-25 (AY 2025-26) without a late fee is 31st July 2025.
Updated returns cannot be filed under section 139(8A) in some cases
There are specific scenarios where filing an updated return under Section 139(8A) is not permitted:
- Loss returns: Updated returns cannot be filed if the return is showing a loss.
- Tax liability adjustments: If the updated return results in reducing the tax liability or increasing the refund, it cannot be filed under this section.
- Pending or completed assessments: If an assessment is already pending or has been completed, updated returns under Section 139(8A) cannot be filed.
- Prescribed acts: If the Assessing Officer has details about the taxpayer under any prescribed acts, the updated return cannot be filed.
- Surveys and inspections: Updated returns cannot be filed if any survey has been conducted under section 133A of the Income Tax Act.
Prescribed time for updated returns as per section 139(8A)
The timeframe for filing updated returns under Section 139(8A) is set as follows:
1. Time limit: Taxpayers have 24 months from the end of the relevant assessment year to file an updated return. This extended period allows taxpayers to correct their returns well beyond the original due date.
2. Examples of due dates:
- For Assessment Year (AY) 2021-22 (Financial Year (FY) 2020-21), the last date to file an updated return is 31st March 2025.
- For AY 2022-23 (FY 2021-22), the last date to file an updated return is 31st March 2026.
- For AY 2023-24 (FY 2022-23), the due date to file an updated return is 31st March 2027.
Additional tax/penalty for filing updated returns under section 139(8A)
When filing updated returns under Section 139(8A), taxpayers must account for additional taxes and penalties. If an updated return is filed within one year from the end of the relevant assessment year, a penalty of 25% of the average tax and interest payable is applied. If the updated return is filed between one and two years from the end of the assessment year, the penalty increases to 50% of the average tax and interest payable. This penalty structure incentivizes timely correction of returns and ensures compliance with tax regulations.
Required details to be filed in form ITR-U
Form ITR-U is designed for filing updated returns under Section 139(8A). Essential details to include in Form ITR-U are:
- Eligibility confirmation: Verify eligibility to file updated returns as per Section 139(8A).
- ITR form selection: Choose the appropriate ITR form (ITR-1, 2, 3, 4, 5, 6) for the updated return.
- Update reasons: Indicate reasons for updating the return, such as unreported income, incorrect tax rates, or prior return issues.
- Filing period: Specify the period during which the updated return is being filed, ensuring compliance with the one-year or two-year timeframe from the end of the assessment year.
Calculate total payable tax for updated returns
To determine the total payable tax for updated returns, follow these steps:
- Tax payable: Calculate the tax on additional income as per the adjusted ITR.
- Interest: Add any interest levied on additional income under Sections 234A, 234B, and 234C.
- Late fee: Include any late fees under Section 234F.
- Taxes paid: Deduct taxes already paid, including TCS, TDS, advance tax, or regular assessment tax.
- Refund claimed: Subtract any total refunds issued as per the original return.
- Additional tax: Add the additional tax at 25% to 50% based on the filing timeline.
- Total amount payable: Sum all these components to get the total amount payable.
Penalty / Additional tax payable
Late Filing Fees u/s 234F
Starting from FY 2017-18, a late filing fee is applicable under Section 234F if you file your income tax return (ITR) after the due date.
For example, the due date for filing ITR for FY 2024-25 is 31st July 2025. If you fail to file your return by this date, you can still submit a belated return by 31st December 2025, but a penalty for late filing will apply.
A maximum penalty of Rs. 5,000 will be charged if the ITR is filed after 31st July 2025 but before 31st December 2025.
However, small taxpayers with total income not exceeding Rs. 5 lakh will have a reduced penalty of Rs. 1,000 for late filing.
Benefits of filing ITR on time
Filing your Income Tax Return (ITR) on time not only keeps you compliant but also offers multiple financial and legal benefits:
1. Hassle-Free Loan Approvals
A timely filed ITR acts as proof of income, making it easier to secure loans for cars, homes, or personal needs. Banks and financial institutions often require ITR documents before approving loan applications.
2. Quick Tax Refund Processing
If you have paid excess tax, filing your ITR promptly ensures a faster refund process. The sooner you file, the quicker your refund gets credited.
3. Valid Proof of Income and Address
ITR documents serve as credible proof of income and address, which is often required when applying for loans, credit cards, or visas.
4. Faster Visa Approvals
Many embassies and consulates require ITR copies from the past few years while processing visa applications. Filing on time ensures a smooth and hassle-free process.
5. Carry Forward Losses
Filing before the deadline allows you to carry forward losses from business, capital gains, or other sources to offset future taxable income, reducing tax liability in subsequent years.
6. Avoid Penalties and Legal Action
Timely filing helps you avoid late fees, penalties, and potential prosecution by the Income Tax Department, ensuring compliance with tax regulations.
Conclusion
Section 139(8A) provides a valuable opportunity for taxpayers to correct and update their returns, ensuring accurate tax reporting. While this provision offers a chance to amend previous errors, it is accompanied by penalties for late submissions. By understanding the requirements and deadlines associated with Form ITR-U, and calculating the total payable tax accurately, taxpayers can comply with tax regulations and avoid additional costs. This process is crucial for maintaining tax integrity and ensuring that all income is reported correctly.
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