The government launched the updated Income Tax Return (ITR) in the Finance Act, 2022. With this, the time to revise income tax return had decreased significantly. However, to use the facility of updated ITR filing, additional tax has to be paid on outstanding tax. The question is what is the updated ITR?
If you are ITR till the last date (ITR) You miss on filing or there is any disturbance in the file ITR on your side or you feel that the income you have declared is less than your actual income, then you are updated income tax returns in ITR-U form Can file. With this, the Income Tax Department will not send you notice and you will avoid paying more money in the form of penalty. The Income Tax Department has noticed the form ITR-U to file updated returns for the Financer Year 2019-20 and later years.
When can a taxpayer file updated returns?
The Finance Act, 2022 was allowed to file updated returns in certain situations. In the Finance Act 2025, the limit of time has been increased to file updated returns and new conditions have been implemented:
Taxpayers can file updated returns in the following situations:
If the taxpayer has filed an original return under section 139 (1), but later he has come to know that he has forgotten to tell an income or he has told less income.
If the taxpayer has filed a billowed return under 139 (4), but later he feels that he has not told any income.
-If the taxpayer has filed a revised return under section 139 (5) within the scheduled deadline but later he finds out that he has not told any income correct.
-If a taxpayer misses on filing income tax returns for some reason.
Conditions in which updated returns cannot be filed:
-If there is no additional tax liability (this means that when the refund increases by filing the return, the tax liability decreases or the loss increases.)
-If the Income Tax Department has started processing or abolished in accesses for the respective assessment year.
If the show cause notice has been issued under Section 148A after 36 months of the end of the respective assessment year. However, in the Finance Bill 2025 it has been said that if the assessing officer under section 148 (3) it decides that the case is not fit for the recession, then the assessment year can be filed updated returns within 48 months of the end of the year. .
-If Returns are being filed under Anti -Ewais Provisions to declare income from unauxplanded cash credit or Benani transactions.
In addition, it is necessary to keep in mind that a taxpayer can file only one updated returns in an assessment year and it cannot be revised once it is filed.
Period increased to file ITR-U under Budget 2025
One of the major changes made in Budget 2025 is that the given time to file updated returns has been extended. The first updated returns were required to file the respective assessment year within 24 months. Now it has been increased to 48 months.
For example, according to earlier rules, the updated returns for the Assessment Year 2020-21 (Financial Year 2019-20) could be filed by 31 March 2023. Now after the time is extended, updated returns for the Assessment Year 2022-23 (Financial Year 2021-22) can be filed till March 31, 2027.
How to file updated returns?
The process of filing ITR-U through income tax portal incometax.gov.in is quite easy. Taxpayers have to select the reason for filing updated returns, then it has to be verified under digital signature or EVC.
Revised additional tax under updated returns
The facility of updated return filing is not free. Taxpayers have to pay additional tax on tax paid under general provision. In Budget 2025, additional tax liability has been changed in this way:
-Updated returns filed within 12 months from the end of the assessment year:
Additional Tax = (Regular Tax + Interest) 25%
-Updated returns filed within 12 to 24 months from the end of the assessment year:
Additional Tax = (Regular Tax + Interest) 50%
-Updated returns filed within 24 to 36 months since the end of the assessment year (New Provision in Budget 2025): 60% of Additional Tax = (Regular Tax + Interest)
-Updated returns filed within 36 to 48 months from the end of the assessment year (New Provision in Budget 2025): 70% of Additional Tax = (Regular Tax + Interest)
This means that after filing updated returns after 36 months, penalty will have to be paid as tax on tax and its interest amount as more tax.
Increasing the period of filing updated returns to 48 months has given more time to fix their mistake and follow the income tax rules. However, due to more additional tax, it becomes quite expensive.
Given the complexity of tax related issues, if you want to file updated returns, it would be good to seek the help of a chartered accountant or tax advisor to avoid any mistake.
By filing the updated returns, the taxpayer avoids non-complex, but it is always right to file income tax returns correctly. This does not have to pay non-essential penalty or interest.
(The author is CA. He is an expert on personal finance, especially income tax related cases.)