What Is an Updated Return (ITR-U)?
An Updated Income Tax Return (ITR-U) is a special tax filing option that allows taxpayers to correct or disclose additional income for previous years even after the regular and revised return deadlines have passed.
- It applies when you either missed filing an ITR or need to correct the income declared earlier.
- It must be filed in the relevant income tax return filing form (ITR-1 to ITR-7) depending on the taxpayer’s profile and income sources.
This mechanism was introduced to improve voluntary compliance and reduce litigation.
2. Time Limits to File an Updated Return (ITR-U)
Under Section 139(8A) of the Income-tax Act, the time limit for filing an updated return has been substantially extended:
- Up to 48 months (4 years) from the end of the relevant assessment year.
- E.g., for Assessment Year 2021-22 to 2024-25, ITR-U can be filed during FY 2025-26.
This replaced the earlier, shorter timeline (previously 24 months).
3. Tax & Additional Liability When Filing ITR-U
Filing an updated return comes with additional tax and interest, depending on how late it is filed:
- After the original due date and within 12 months → 25% extra tax + interest
- Between 12 and 24 months → 50% extra tax + interest
- Between 24 and 36 months → 60% extra tax + interest
- Between 36 and 48 months → 70% extra tax + interest
This is designed to discourage long delays and compensate for delayed tax payments.
4. Key Filing Dates & Recent Extensions
Assessment Year 2025-26 (FY 2024-25)
For annual ITR filing:
- The Central Board of Direct Taxes (CBDT) extended the due date for filing ITRs for AY 2025-26 from 31 July 2025 to 15 September 2025.
For revised returns, December 31, 2025, was the last date to make corrections using the revised ITR mechanism.
Even if that deadline passes, ITR-U remains an option under longer timelines, though tax and interest apply.
New E-Filing Features
The Income Tax e-filing portal now also allows taxpayers to directly file rectification requests online for certain tax orders, adding convenience and transparency to corrections.
5. What Changed in Recent ITR Forms
New and updated ITR forms for AY 2025-26 include several important changes aimed at simplifying filing and improving accuracy:
Simplified Options for Small Taxpayers
- ITR-1 (Sahaj) and ITR-4 (Sugam) can now be used by those with long-term capital gains (LTCG) up to ₹1.25 lakh from listed shares or mutual funds; previously, taxpayers with any capital gain couldn’t use the simpler forms.
More Detailed Reporting
- In ITR-2 and ITR-3 forms, taxpayers must now:
- Report share buybacks and dividend income separately.
- In Form ITR-3, the Schedule AL asset-liability disclosure threshold has been raised from ₹50 lakh to ₹1 crore, reducing the burden for middle-income taxpayers.
- Capital gains must be segregated based on whether they occurred before or after key budget changes (July 23, 2024).
More Structured Data Fields
- The updated forms require detailed TDS section codes and a more granular selection of deductions (e.g., Sections 80C, 80D, etc.) than older versions.
6. What’s Coming Next (New Income Tax Act)
A completely new set of ITR forms and related rules under the Income Tax Act, 2025, is expected to be notified by January 2026 and will come into effect from April 1, 2026. These forms aim to simplify tax compliance further by reflecting the updated tax regime and rules.
However, for AY 2026-27 and FY 2025-26, the ITR forms are still based on the Income Tax Act, 1961.
Key Takeaways for Taxpayers
- File on time: Avoid additional tax and interest by filing the original or revised ITR within the due dates.
- Use ITR-U: If you missed deadlines or need to disclose extra income, an updated return gives you legal flexibility.
- Choose the correct form: Know which ITR form applies to you; simpler forms are now available for small investors.
- Prepare for new rules: The tax system and forms are set for major modernization in 2026.
Taxcellent helps you in filing updated ITR vide ITR Form 1 to ITR Form 7 within statutory timelines.
