The New ITR-U: 10 Things to Know Before Filing Your Income Tax Return

The New ITR-U: 10 Things to Know Before Filing Your Income Tax Return

Updated ITR Filing 2022: The IRS recently released a new form for the filing of Updated Income Tax Returns.

Updated ITR Submitting 2022:
The Internal Revenue Service recently released a new form for filing Updated Income Tax Returns. Budget 2022 featured a new idea of updated returns. It gives taxpayers two years from the end of the relevant assessment year to alter their ITRs. The new feature is meant to assist taxpayers who frequently make mistakes or omissions while filing ITRs.

The following are ten things you should know about the ITR filing update:

1. On the Updated ITR form, taxpayers must state the reason for filing as well as the amount of income that will be taxed in the updated return.

2. Taxpayers are not obligated to break down the income reported on their ITR (Updated).

3. Taxpayers can now file their amended income tax returns for fiscal years 2019-20 and 2020-21 using the new form ITR-U.

4. A digital signature or an electronic verification code is required for some taxpayers to file the Updated ITR electronically. The taxpayer must file the applicable assessment year’s ITR Forms and submit them with the new ITR-U.

5. Within two years of the end of the relevant assessment year, the ITR-U must be filed. Taxpayers must also explain reasons for revising their ITR in order to do so. There are a variety of reasons for submitting ITR-U, including a previous return that was not filed, income that was not declared correctly, incorrect income heads chosen, and the reduction of a carried forward loss, among others.

6. If an updated ITR is filed within a year (12 months) of the end of the relevant assessment year, a taxpayer must pay an extra 25% tax and interest owed.

7. If an amended ITR is filed after a year (12 months) but before 24 months from the end of the relevant assessment year, the taxpayer must pay an additional 50% tax and interest due.

8. If the person fails to pay the additional taxes, the return will be declared void.

Also Read: DELAY IN TAX AUDIT DUE TO ONGOING ASSESSMENT IN SOME OTHER ACT. PENALTY U/S 271B TO BE DELETED


9. If the entire tax owed is to be lowered and losses are to be offset against income, for refund, or for an increase in refund amount, you cannot file ITR-U.

10. For each Financial Year, a taxpayer can only file an Updated ITR once. As a result, it should be done with caution.

DELAY IN TAX AUDIT DUE TO ONGOING ASSESSMENT IN SOME OTHER ACT. PENALTY U/S 271B TO BE DELETED

Penalty u/s 271B must be removed if a tax audit is delayed due to an ongoing assessment under another Act.

The assessee filed a return of income on January 6, 2016, which was inspected under Section 143. (3). Because the assessee’s total turnover/gross receipts surpassed the Rs.1 crore threshold, he was required to have his accounts audited under Section 44AB of the Act and submit the audit report before the deadline, which in this case was October 31, 2015. Because the accounts were not audited within the time limit, Ld. AO imposed a penalty of Rs.1,12,715/- under section 271B.

The sentence was upheld by CIT(A) on appeal. Assessee preferred an appeal to the tribunal after being aggrieved by the order.

The ld. AR argued before the tribunal that there was adequate cause for the audit to be delayed because the assessee was a cooperative society governed by the Tamil Nadu Cooperative Societies Act, 1983 and its rules. The society’s finances could not be audited for the relevant AY until the assessment was completed. Because the assessee society was not in charge of the matters connected to the appointment and completion of the audit under the aforementioned Act and Rules, the delay in the completion of the audit was not due to any fault on their part. As a result, this qualifies as fair cause, and the penalty was eliminated.

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On the other hand, the Ld. DR justified the sentence by claiming that it was imposed in conformity with the law. After hearing both parties, the ITAT determined that there was adequate cause for the late filing of the income tax return and audit. The assessee was audited under the Tamil Nadu Cooperative Societies Act, 1983, and its implementing rules.

The assessee had no control over the appointment of an auditor or the execution of the audit. It should also be highlighted that the audit was eventually finished on December 31, 2015, and the assessee promptly filed a return. As a result, ITAT removed the penalty.

Do you have to pay tax in advance? hurry up! The deadline is March 15.

Do you have to pay tax in advance?  hurry up! The deadline is March 15.

When an income is paid, taxes are usually deducted/collected at the source. However, because not all incomes are subject to TDS and the tax deducted at source may be less than the applicable slab rate, the remaining tax due must be paid in advance. Let’s look at the advance tax provisions that apply to individuals.

Who has to pay advance tax and when do they have to pay it?

Every taxpayer whose tax due, after deducting TDS and TCS, exceeds Rs. 10,000/- is required to pay advance tax in four instalments on the 15th June, 15th September, 15th December, and 15th March of the financial year, in the ratios of 15%, 30%, 30%, and 40%, respectively. Any advance tax shortfall in any of the instalments must be made up in the next instalment. So, if you haven’t made any instalments for the current year, you can discharge your whole advance tax liability by March 15th. The advance tax burden on capital gains and dividends income can be discharged in instalments due after the income is accrued.

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People who are subject to the presumptive scheme of taxation under Sections 44AD and 44ADA can pay their advance tax in one instalment on March 15th. If you are a senior person with no income from a business or profession, you are free from paying advance tax, which must be paid before the ITR filing deadline.

Interest is due if there is a deficiency or if advance tax is not paid.

You must pay interest of 1% each month for each delay or deficiency in advance tax. Because the next instalment is due after three months, even if you miss the due date by one day, you essentially pay interest for three months. If your advance tax debt is Rs. 1 lakh and you fail to pay the Rs. 15,000/- due on the 15th of June, you will be charged interest of Rs. 450/-, even if you pay it on the 16th of June.

advanced tax

Any advance tax paid by March 31st of the following year is likewise considered advance tax. So, if you fail to pay the advance tax instalment by the 15th of March, or if you pay it on the 15th but still have a shortfall, you can pay it by the 31st of March 2022, but you will have to pay penal interest of 1% for one month in addition to the interest you must pay for any shortfall in previous instalments.

What happens if an advance tax liability is not paid by the financial year’s end on March 31st?

If you are unable to pay the full amount of advance tax, you can pay it under the name of self-assessment tax at a cost. For non-payment or a deficiency in advance tax payment, you must pay interest at 1% per month or part of a month from April 1st of the following year until you really pay the self-assessment tax. If the shortfall does not exceed 10% of your total tax liability, no interest will be charged. This is in addition to the interest that will be charged if advance tax is not paid during the year.

How to decrease tax liability by planning your income tax.

It’s important to remember that if you don’t pay your advance tax on time, you’ll have to pay penalty interest of 1% per month from April 1st to the date of actual payment of self-assessment tax. You’ll also have to pay penalty interest if you file your ITR after the due date, which is usually July 31st for salaried and most tax payers. This interest is payable from the due date of the ITR to the actual filing date of the return. Even if you have already paid your self-assessment tax by the due date for filing your income tax return, you will be charged interest.

What happens if you pay more tax in advance than you owe?

If you pay more tax than your actual tax burden, either through advance tax or TDS, you can seek a refund for the difference, but you’ll have to file an ITR to get it. Furthermore, you are entitled to interest at a rate of 6% per annum on any excess tax paid.