Updated Income Tax Return under Section 139(8A) r.w. Section 140B

Article explains Provisions of Section 139(8A) of Income Tax Act, 1961 related to Updated Income Tax Return Applicability of sub-section 8(A) of Section 139, When sub-section 8(A) of Section 139 shall not apply,  Time limit for Filing of Updated Income Tax Return and Payment of Additional Tax under section 140B related to Updated Return.

1. Section 139(8A) of Income Tax Act, 1961 related to Updated Income Tax Return

Finance Bill 2022 has proposed a new sub-section 8(A) in section 139 for furnishing the updated return. As per newly proposed section 139 8(A) of the act, any person, who has furnished his original return of income under sub-section (1), furnished belated return under sub-section (4) or  furnished revised return under sub-section (5) of section 139 of the Act, can now  furnish an updated return in case of any omission or wrong statement in his earlier return of income by such person. In case a person has not furnished his return of income even then such person can furnish an updated return under proposed sub-section 8(A) of section 139 of the Act. This newly inserted section provides an opportunity to those person who want to correct any omission or error or wrong statement given in his return filed and this return may be original return, belated return or revised return. It means a person can update its revised return as well as belated return even after the end of the relevant assessment year under sub-section 8(A) of section 139 of the Act.

2. Applicability of sub-section 8(A) of Section 139:-

This newly proposed sub-section 8(A) of section 139 shall be applicable to all person.

3. When sub-section 8(A) of Section 139 shall not apply:-

1. The sub-section (8A) of Section 139 shall not apply to a person in the following cases:-

2. In case of return of loss, or

3. In case it has effect to reduce the tax liability determined on the basis of return submitted under sub-section (1), sub-section (4) or sub-section (5) of section 139, or

4. In case it results in refund or it increases the refund amount due on the basis of return furnished under sub-section (1), sub-section (4) or sub-section (5) of section 139, or

5. Further no updated return could be furnished by any person for the relevant assessment year, in case an updated return has been furnished by him under sub-section 8(A) of section 139 of the Act for the relevant assessment year, or

6. In case a search has been initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in case of such person, or

7. In case a survey has been conducted under section 133A other than sub-section (2A) of that section, in case of such person, or

8. In case a notice has been issued to the effect that any money, bullion, jewellery or valuable article or thing, seized or requisitioned under section 132 or section 132A in the case of any other person belongs to such person, or

9. In case a notice has already been issued to the effect that any books of account or documents, seized or requisitioned under section 132 or section 132A  in case of any other person, pertain or pertains to, or any other information contained therein, relate to, such person, or

10. any proceeding for the assessment or reassessment or re-computation or revision of income under the Act is pending or has been completed for the relevant assessment year in case of such person, or the assessing officer has information in his possession in respect of such person for the relevant assessment year  under PMLA Act, 2002, or under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, or under Prohibition of Benami Property Transactions Act, 1988, or under The Smugglers and Foreign Exchange Manipulations (Forfeiture of Property) Act, 1976 and the same has been communicated to him, prior to the date of filling of return under Sub-Section 8(A) of section 139 of the Act, or

11. intimation for the relevant assessment year has been received under an agreement referred to in section 90 or 90A of the Act of such person and the same has been communicated to him prior to the date of filing of return under sub-section 8(A) of section 139 of the Act, or

12. any prosecution proceeding under Chapter XXII have been initiated for the relevant assessment year in respect of such person, prior to the date of filling of return by such person under sub-section 8(A) of section 139 of the Act, or

13. he is a person or belongs to a class of persons, as may be notified by the board in this regard.

4. Time limit for Filing of Updated Income Tax Return

The prescribed time limit to furnish an updated return is twenty-four month from the end of the relevant assessment year.

5. Payment of Additional Tax under section 140B related to Updated Return

As per proposed Section 140B of the Act, an assessee is required to pay additional tax and submit the proof of the payment of tax along with updated return of income.

There may be two situations in case of a person. Either person has furnished the return of income u/s 139 (1), 139 (4) or 139(5) of the Act or has not furnished return of income.

• In case return has been furnished u/s 139(1), 139(4) or 139(5):- In case, an assessee has furnished return of income under sub-section (1), sub-section (4) or sub-section (5) of section 139, shall be liable to pay the tax due along with interest and fee payable under the Act for delay in furnishing return of income or any default or delay in payment of advance tax, along with the payment of additional tax, as reduced by the amount of interest paid in the earlier return.

The tax payable shall be computed after considering the following:-

• Self Assessment Tax, Advance Tax, Tax deducted at source or tax collected at source claimed in earlier return;
• Any relief of tax or tds claimed under section 90 and section 91 with respect to tax paid in a country outside india on such income which has not been claimed in earlier return;
• any relief of tax claimed under section 90A with respect to tax paid in any specified territory outside india referred to in that section on such income which has not been claimed in earlier return;
• any tax credit claimed, to be set off under section 115JAA or section 115JD, which has not been claimed in earlier return.

The amount of tax so calculated shall be increased by the amount of refund, if any, issued in respect of such earlier return.

• In case return has not been furnished u/s section 139(1) or 139(4):- In case, an assessee has not furnished its return of income under sub-section (1), sub-section (4)  of section 139,  shall be liable to pay the tax  due along with interest and fee payable under the Act for delay in furnishing return of income or any default or delay in payment of advance tax, along with the payment of additional tax.

The tax payable shall be computed after considering the following:-

• Advance Tax, Tax deducted at source or tax collected at source;
• Any relief of tax claimed u/s 89;
• Any relief of tax or tds claimed under section 90 and section 91 with respect to tax paid in a country outside india on such income ;
• any relief of tax claimed under section 90A with respect to tax paid in any specified territory outside india referred to in that section;
• any tax credit claimed to be set off under section 115JAA or section 115JD.

Additional tax payable at the time of furnishing the updated return under sub-section 8(A) of section 139, shall be equal to twenty five percent of aggregate of tax and interest payable if such updated return is furnished before completion of twelve month from the end of the relevant assessment year.

Additional Tax, payable at the time of furnishing the updated return under sub-section 8(A) of Section 139, shall be equal to Fifty percent of aggregate of tax and interest payable  if such updated return is furnished after expiry of  twelve month from the end of the relevant assessment year but before completion of the period of twenty four month from the end of the relevant assessment year.