ITR-U Explained: What Is It, Who Can File And Other Key Details

The Central Board of Direct Taxes (CBDT) has notified the Updated Income Tax Return form, commonly known as the ITR-U form. This comes after amendments introduced in Budget 2025 that revised the rules for filing updated returns.

Starting April 1, 2025, taxpayers now have up to 48 months — or four years — from the end of the relevant assessment year to file an updated ITR. This is a major change from the earlier rule, where taxpayers were given only 24 months, or two years, to make such corrections. The extended timeline gives taxpayers more flexibility to correct errors, report previously missed income, or make necessary changes in their earlier filed returns.

Let’s take a look at what exactly ITR-U is and when you should use it. Here are all the key details you need to know.

Have you ever made a mistake in your income tax return (ITR) and wished you could fix it? Did you miss the deadline and face penalties? Maybe you forgot to report some income or claim deductions? If so, you're not alone.

To make the process more flexible and transparent, the government introduced the updated returns (ITR-U). This facility allows taxpayers to rectify and update their income tax returns by disclosing additional income or correcting any mistakes in their original, belated, or revised returns.

It is applicable for taxpayers who have:

• Not filed their original or belated return

• Made errors or omissions in the previously filed ITR

• Missed reporting certain income

• Filed an incorrect return or used the wrong ITR form

ITR-U can be filed only after the end of the relevant assessment year. For example, income earned in FY 2024-25 (April 1, 2024 – March 31, 2025) will be assessed in AY 2025-26 (April 1, 2025 – March 31, 2026). As per the amendment of Section 139(8A) of the Income Tax Act, 1961, after the Budget 2025, the taxpayers can file ITR-U in FY26 for Assessment Years 2021-22 to 2024-25.

As per the new rules, here are the deadlines for filing updated returns:

For incomes in FY 2023-24: March 31, 2029

For earnings in FY 2022-23: March 31, 2028

For missed income reporting in FY 2021-22: March 31, 2027

For incomes in FY 2020-21: March 31, 2026

Any taxpayer who has made a mistake or missed reporting income in the following types of returns is eligible to file an updated return:

• Original return

• Belated return

• Revised return

You can also file an updated return in situations such as:

• Not filing the return at all, missing both the original and the belated deadlines.

• Incorrect declaration of income.

• Selection of the wrong head of income.

• Payment of tax at an incorrect rate.

• To reduce carried forward losses.

• To reduce unabsorbed depreciation.

• To reduce tax credit under Sections 115JB or 115JC.

You need to keep in mind that only one updated return can be filed for a specific assessment year.

Filing ITR-U is not allowed in these cases:

• If you have already filed an updated return for the same assessment year.

• If you want to file a nil return or a return showing a loss.

• If you want to claim or increase the refund amount.

• If the updated return leads to a lower tax liability than before.

• If search proceedings have been initiated under Section 132.

• If a survey has been conducted under Section 133A.

• If any books, documents, or assets have been seized or requisitioned under Section 132A.

• If an assessment, reassessment, revision, or re-computation is either pending or completed.

• If there is no additional tax liability (for example, when your tax dues are already covered by TDS or carried forward losses).

• If a show-cause notice has been issued under Section 148A after 36 months from the Assessment Year.

Filing an updated return comes at a cost. You must pay the additional tax as a percentage of the tax and interest due:

• If ITR-U is filed within 12 months after the end of the assessment year, an additional 25% tax plus interest applies.

• For filings between 12 and 24 months, the additional tax increases to 50% plus interest.

• If filed between 24 and 36 months, the taxpayer must pay 60% of the additional tax along with interest.

• For filings between 36 and 48 months, 70% of the additional tax is payable, along with interest.

The ITR-U is a welcome move for honest taxpayers who may have made genuine errors or missed deadlines. It helps avoid penalties, interest, and possible legal action in the future. However, it’s crucial to use this provision responsibly and within the prescribed time frame.