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Filing, Advantages & Drawbacks

  • Posted By SuperCA
  • On 28 March

Filing, Advantages & Drawbacks

The Government has introduced a new form ITR-U for taxpayers to file updated IT returns. Whether you missed a deduction or made an honest mistake, fear not, as ITR-U lets you rectify errors and omissions for up to two years from the end of the relevant assessment year. Filers of ITR-U must explain their circumstances and the amount of their income that should be subject to taxation. Taxpayers can currently use this form to submit amended IT returns for the 2019–20 and 2020–21 tax years.

What’s ITR-U and Who Has to File It?

Income Tax Updated Return (ITR-U) is a type of income tax return as per section 139(8A) of the Income Tax Act 1961. Taxpayers can do things like reduce their income tax credit, decrease their carry forward loss, and decrease their unabsorbed depreciation by filing an amended return. It provides a straightforward interface that walks users through the tax filing procedure. Using this service has made it much easier for taxpayers to meet the April 15th deadline without making a trip to the Income Tax Department in person.

Taxpayers have the freedom to file updated return using Form ITR-U, regardless of whether they have filed their original, revised, or delayed return of income - as per section 139(8A) of the Income Tax Act 1961. A valid basis for filing an amended return is required, such as the need to rectify incorrect information or claim previously unclaimed deductions. As a result, taxpayers must provide reasonable explanations for amending tax returns that have already been filed, for revising improper income reporting, for revising errors in selecting the heads of income, or for revising errors in decreasing carried forward losses.You can submit your ITR-U form within two years after the conclusion of the evaluation year.


Informing taxpayers about the convenience of using Form ITR-U could potentially increase their likelihood of filing their taxes in compliance with all relevant rules and regulations. Some of the benefits of using ITR -U are discussed below -

  • One of the most useful features of ITR U is its simplicity. Taxpayers can correct mistakes and make adjustments by changing the income head, decreasing the carry forward loss, decreasing the unabsorbed depreciation, and decreasing the income tax credit.
  • With Form ITR-U, taxpayers can update their tax returns without making a trip to the local income tax office or mailing in any paperwork.
  • Taxpayers who file amended returns can avoid interest and penalties for failing to disclose income or providing erroneous information. As the service is available at all hours, people can do it whenever it is convenient for them.
  • Taxpayers can recalculate their income and expenses, make up for lost deductions, and improve their tax planning by lowering their taxable income and overall tax bill.
  • ITR U's precision is yet another perk for taxpayers who rely on the service. The utility takes taxpayers step-by-step through the process of completing their tax returns, making sure they don't overlook any crucial information. Further, the tax liability is calculated mechanically, eliminating human error.


There are a number of disadvantages to filing a return under this clause. One major drawback is that this service is available only to those taxpayers with taxable incomes of up to Rs. 50 lakh, so those with higher incomes would have to file their tax returns manually.

The short window in which taxpayers can submit their returns is another drawback of ITR U. Failure to submit tax returns by the AY’s end can result in a fine of up to Rs. 10,000.

In addition, taxpayers who use this provision on their returns may miss out on tax benefits. For instance, they might not be able to write off their charitable contributions to some organizations.

Moreover, the lack of individualized feedback is a significant downside of ITR U. Step-by-step instructions for filing tax returns are provided, but the utility does not offer tailored guidance based on each client's specific tax status, which could lead to the consumer failing to take advantage of all available tax credits and deductions.

Cases When You Can’t Submit an Amended Tax Return

  • The following situations exclude submission of the revised return:
  • In case the revised return is a return of the loss.
  • If the amended return results in a lower income tax due than the original return, then the tax due can be reduced by filing the amended return.
  • If the revised returns result in a larger refund,
  • If a search has been initiated under section 132,
  • A request for books of accounts or other records under section 132A.
  • If a survey is conducted under section 133A
  • In the event that an assessment, revaluation, recalculation, or revision is in progress or has concluded during the year.
  • In cases where the Assessing Officer has information against the assessee under the Prevention of Money Laundering Act, the Black Money (Undisclosed Foreign Income and Assets) and Tax Act, the Benami Property Transactions Act, or the Smugglers and Foreign Exchange Manipulation Act, and the assessee has been informed of this information.
  • Other Notified Reasons from time to time


Introduced in the Union Budget 2022, updated returns are the new cool kids on the block, giving you the power to stay on top of your tax game. However, despite the fact that ITR U has made it easier for taxpayers to file their returns from the prior year, there are a few downsides to it that must be taken into account. Taxpayers should weigh the advantages and disadvantages of utilizing this method before deciding whether or not to include it in their tax filings. Whether or not taxpayers choose to use ITR U, it is still their responsibility to file their returns on time to avoid penalties and other legal consequences.