Updated Return (ITR-U): Who Should Use It?
The Updated Return, commonly known as ITR-U, was introduced by the Income Tax Department to provide taxpayers with an opportunity to correct errors or report missed income after filing their original Income Tax Return (ITR).
This provision helps taxpayers voluntarily comply with tax laws and avoid future legal complications.
After filing their ITR, many taxpayers later realise that:
- Some income was missed
- Wrong details were reported
- Incorrect tax calculations were made
- The return was not filed at all
This is where ITR-U becomes useful.
Who Can Use ITR-U?
ITR-U can generally be filed if:
- ✔ Original return was missed
- ✔ Certain income was not disclosed earlier
- ✔ Wrong income head was selected
- ✔ Tax liability needs correction
- ✔ Additional taxes need to be paid voluntarily
However, it is important to understand:
- ❌ ITR-U cannot be used to claim extra refunds
- ❌ It cannot be used to reduce already declared tax liability
It is mainly meant for correcting omissions that result in additional tax payment.
Why Is This Important?
Many notices from the Income Tax Department arise because of:
- AIS mismatches
- Unreported FD interest
- Missing capital gains
- Incorrect income disclosures
Filing an updated return voluntarily can help improve compliance and reduce future tax complications.
Before filing ITR-U, taxpayers should carefully review:
- ✔ AIS
- ✔ Form 26AS
- ✔ Bank interest
- ✔ Capital gains
- ✔ Previous ITR details
Because small omissions today can later become bigger compliance issues.
(Contributed by Anjali Tomar, Relationship Manager, Team Arjun, Hum Fauji Initiatives)
👉 Need help reviewing your tax records or understanding ITR corrections? Stay connected with us for regular tax and compliance updates.
Retiring Soon? Understand Your Retirement Corpus Taxation
For Armed Forces personnel, retirement is not just the end of service — it is the beginning of a completely new financial phase.
After years of disciplined service to the nation, managing retirement benefits wisely becomes equally important. While many focus on building a retirement corpus during service, taxation on retirement benefits is often overlooked.
Defence retirees generally receive multiple components such as:
- Gratuity
- Commuted pension
- Leave encashment
- Provident Fund (DSOPF) corpus
- Insurance (AGIF/NGIS/AFGIS) accumulation
- Monthly pension
- NPS corpus (if applicable)
👉 Every component is taxed differently.
Key Tax Components to Understand
Tax-Exempt Components:
Gratuity, Commuted Pension, Leave Encashment, PF, and Insurance accumulation are fully tax-exempt for government employees, helping preserve a larger share of retirement savings.
Monthly Pension:
Taxable under ‘Income from Salary’, though deductions and rebates may reduce liability. Disability pension holders and gallantry award winners have their entire pension tax-free.
NPS Withdrawals:
Up to 60% of the maturity corpus can currently be withdrawn tax-free, while annuity income remains taxable.
Common Mistakes Retirees Make
- ❌ Keeping excess funds idle in savings accounts
- ❌ Ignoring post-retirement cash flow planning
- ❌ Investing large retirement amounts without proper allocation strategy
Retirement planning is not only about receiving benefits but about managing them efficiently so that regular income, taxation, liquidity, and long-term financial security remain balanced.
After serving the nation for decades, your retirement corpus should continue serving you wisely for years ahead — which requires thoughtful balancing, investing, and preservation.
(Contributed by Riya Bhandari, Relationship Manager, Team Arjun, Hum Fauji Initiatives)
👉 Your retirement corpus deserves disciplined financial planning.
When Safe Returns Rise, Why Do Equities Shake?
Back in 2020, bank FDs were offering around 5–5.5%. At that time, many investors moved aggressively towards equities because fixed-income returns looked too low to beat inflation.
Now imagine a different situation:
- Government bond yields move closer to 7.5–8%
- FDs start offering attractive rates again
- Debt products begin giving stable returns with lower risk
Investor thinking changes.
Earlier:
- Equity expected return → 12%
- FD return → 5%
Now:
- Equity expected return → 12%
- Safer returns → 8%
👉 Investors start asking: “Is the extra volatility worth just 3–4% more?”
What Happens When Bond Yields Rise?
- Money shifts towards safer assets
- Equity valuations cool down
- High-growth stocks face pressure first
- Market volatility increases
This does not mean companies become weak — it means:
👉 Safer investment options start competing with risky assets.
The Bigger Lesson
Markets constantly compare:
“Where can investors get the best return with the least uncertainty?”
Sometimes markets fall not because fear increases — but because safer alternatives become hard to ignore.
(Contributed by Aditya Bhola, Relationship Manager, Team Sukhoi, Hum Fauji Initiatives)
How to Make Your Portfolio Crash-Resistant
Client Query: How to make my portfolio crash-resistant in the current market scenario?
Our Answer: Market uncertainty is unavoidable — but preparation makes a difference.
A crash-resistant portfolio does not mean a portfolio that never falls. It means one that can:
- Absorb volatility
- Recover steadily
- Protect long-term financial goals
Where Investors Go Wrong
- Over-concentration in one sector
- Overexposure to one theme
- Only high-growth investments
👉 The real challenge is not market fall — but whether your portfolio is prepared.
What Should Investors Focus On?
- Diversification matters – Mix of equity, debt, gold, and cash
- Quality over hype – Strong businesses perform better in downturns
- Maintain liquidity – Avoid forced selling
- Stay disciplined – Continue SIPs during corrections
- Avoid emotional decisions – Reactions hurt long-term returns
Simple Way to Think About It
A crash-resistant portfolio is not designed to avoid falls.
👉 It is designed to ensure temporary volatility does not damage long-term goals.
(Contributed by Team Dhruv, Hum Fauji Initiatives)
👉 At HFI, portfolios are built not just for growth — but for stability.
