Here are 10 things you should know about the Updated ITR filing:
1. In the form for Updated ITR, taxpayers are required to declare the purpose for filing as well as the amount of income to be taxed in the updated return.
2. Taxpayers are not required to provide a break up of the income reported in the ITR (Updated).
3. Taxpayers can now use the new form ITR-U to file the updated income tax return for financial years 2019-20 and 2020-21.
4. Certain taxpayers are required to file the Updated ITR electronically using a digital signature or an electronic verification code. The taxpayer has to file the ITR Forms of the relevant assessment year and submit it along with the new ITR-U.
5. The ITR-U has to be filed within two years of the end of the relevant assessment year. For doing this, taxpayers are also required to provide reasons for updating the ITR. According to Tax2Win, the reasons for filing ITR-U may be many, including previous return not filed, income not reported correctly , wrong heads of income choses, reduction of a carried forward loss etc.
6. A taxpayer has to pay an additional 25 percent tax and interest due if updated ITR is filed within a year (12 months) from the end of the relevant assessment year.
7. A taxpayer has to pay an additional 50 percent tax and interest due if updated ITR is filed after a year (12 months) but before 24 months from the end of the relevant assessment year.
8. The return will be considered invalid if the taxpayer fails to pay the additional taxes.
9. According to Tax2Win, you cannot file ITR-U if the overall tax due is to be reduced and losses to be offset against income, for refund or for increase in refund amount.
10. A taxpayer can file an Updated ITR only once for a Financial Year. Hence, it should be done carefully.