The Central Board of Direct Taxes (CBDT) has notified the Income Tax Updated Return form, commonly called the ITR-U form. The new form has been notified as Budget 2025 amended the rules for filing ITR-U. The new filing rules are effective from April 1, 2025.
As per the new rules, ITR-U can be filed within 48 months from the end of the relevant assessment year. Earlier, taxpayers were allowed to file the updated return within 24 months from the end of the relevant assessment year. Now, taxpayers get an extra two years to file updated returns.
Also read: 9 changes in ITR-1, ITR-2, ITR-3, ITR-4 for ITR filing 2025
Tarun Kumar Madaan, Practising Chartered Accountant, says, “The revised ITR-U is a progressive step by the CBDT to promote voluntary tax compliance, enabling taxpayers to update their income for up to four years (48 months) from the end of the relevant assessment year. The Finance Act, 2025, has amended Section 139(8A) to extend the time limit for filing an updated return from 24 months to 48 months, effective from 01-04-2025. Accordingly, in the financial year 2025–26, a taxpayer can file updated returns for Assessment Years 2021–22 to 2024–25.”
Who can file ITR-U?
The income tax rules specify the conditions under which a taxpayer can file the updated return. The tax return using ITR-U can be filed regardless of whether the taxpayer filed an ITR in the relevant assessment year. If the ITR is filed in the relevant assessment year, then the taxpayer is required to provide the acknowledgement number of the original ITR.
Some of the conditions for filing ITR-U are income not reported correctly, ITR not filed previously, wrong heads of income chosen, wrong tax rate, etc.ITR-U cannot be filed if it leads to reduced income or a claim for an income tax refund.
When can ITR-U be filed?
The income tax rules specify that ITR-U can be filed after the end of the relevant assessment year. The financial year 2024-25 ends on March 31, 2025. According to the updated return filing rules, ITR-U can be filed within 48 months of the end of the assessment year. The assessment year is the year in which the assessment of income earned in the previous fiscal year (a year ago) is done. This is done by filing an income tax return. The income earned between April 1, 2024 and March 31, 2025, is assessed between April 1, 2025 and March 31, 2026. Hence, for FY 2024-25, the assessment year (AY) is 2025-26.
Madaan says, “The normal deadline for submitting an original Income Tax Return (ITR) for non-audit cases is 31 July of the relevant assessment year. If this deadline is missed, taxpayers can still file a belated return until 31 December of the same assessment year. However, once this window closes, the only remaining option is to submit an updated return (ITR-U). From January 1 onwards, updated returns become the sole available route for compliance. To facilitate this, the Income Tax Department updates its utility each year to enable the filing of ITR-U from January. Effective from 1 April 2025, the time limit to file an updated return has been extended to 48 months from the end of the relevant assessment year.”
He explains this with an example. For example, for the financial year 2024–25 (assessment year 2025–26), the original return can be filed until 31 July 2025; the belated return until 31 December 2025; and if both are missed, an updated return can be filed anytime from 1 January 2026 to 31 March 2030. However, this extended window is subject to conditions and restrictions under the Income Tax Act. Filing an updated return is not permitted in certain scenarios, such as when the return reflects a total income as a loss, resulting in a reduced tax liability, or leads to an increased refund, etc.”
Last date to file ITR-U
According to income tax rules, the last date to file ITR-U is 48 months from the end of the relevant fiscal year. Hence, for AY 2025-26, the last date to file ITR-U is March 31, 2030.
Penalty applicable on filing ITR-U
A penalty applies to filing an updated return using ITR-U, depending on how quickly the ITR is filed. Madaan says, “This extended window allows taxpayers to rectify past omissions, supporting the government’s objective of improved compliance without prolonged litigation. The additional tax payable on updated returns has also been revised, with rates of 25%, 50%, 60%, and 70% applicable in the first, second, third, and fourth years, respectively.”
According to income tax rules, 25% of an additional tax on aggregate tax and interest is levied if the updated ITR is filed within 12 months from the end of the assessment year. This will hike to 50% as an additional tax if the updated return is filed between 12 months and 24 months. If the updated return is filed between 24 months and 36 months, then 60% as an additional tax is payable by the taxpayer. For updated returns filed between 36 months and 48 months, 70% of the additional tax is payable by the taxpayer.
A taxpayer is required to select the period during which ITR-U is filed from the drop-down menu.
ITR-U once filed must be verified as well.
