The Income Tax Department has enabled the filing of updated ITR (ITR-U) for ITR 2 & 3 for AY 2020-21 and AY 2021-22 on the income tax e-filing portal, a move that will ensure ease of compliance for taxpayers.

 

“E-filing of Updated ITR u/s 139(8A) has also been enabled for ITR 2 & 3 for AY 2020-21 and AY 2021-22 using Excel utility. Refer details in News section. Please click Downloads | Income Tax Department to access and download the same for clicking respective AY folder. Once Updated ITR is prepared, you can upload the XML/JSON by logging into Income-tax website,” according to the income-tax portal.

Within two years of submitting tax returns, taxpayers can make changes as long as their taxes have been paid. The facility of an updated income tax return was initially brought up by the government in the Union Budget 2022. Earlier, ITR 1 & 4 were made available from June 27, 2022.

 

As per the Memorandum to the Budget 2022, “It is proposed to introduce a new provision in section 139 of the Act for filing an updated return of income by any person, whether he has filed a return previously for the relevant assessment year, or not. The proposal for updated return over a period longer than that is provided in the existing provisions of Income-tax Act would on the one hand bring use of huge data with the IT Department to a logical conclusion resulting in additional revenue realization and on the other hand, it will facilitate ease of compliance to the taxpayer in a litigation free environment."

 

According to a new provision proposed by Finance Minister Nirmala Sitharaman during Budget 2022, taxpayers would be able to file "updated" returns to correct omissions and mistakes in their initial tax returns within two years after the end of the relevant assessment year.

 

Updated return, however, cannot be filed in certain cases as per Finance Bill, 2022