Filing an Income Tax Return (ITR) is crucial, but many taxpayers make errors or miss important details while submitting their returns. If you have made a mistake in your ITR or failed to file it on time, the Updated Income Tax Return (ITR-U) can help you correct the errors and avoid penalties or notices from the Income Tax Department.
What is ITR-U?
ITR-U (Updated Income Tax Return) is a provision introduced under Section 139(8A) of the Income Tax Act that allows taxpayers to correct or update their ITRs even after the deadline has passed.
✅ Key Features of ITR-U:
- Helps taxpayers correct errors or add missing details in their ITR.
- Can be filed within 4 years from the end of the relevant assessment year (from April 2025, as per Budget 2025).
- Can be filed only once per assessment year.
- Cannot be used to claim a higher refund.
Who Can File ITR-U?
The following taxpayers can file ITR-U if they have:
✅ Missed filing their ITR within the due date.
✅ Reported incorrect income (e.g., underreported or overreported income).
✅ Filed the wrong ITR form (e.g., filed ITR-1 instead of ITR-2).
✅ Forgot to claim deductions or exemptions (such as under Section 80C, 80D, or 10(14)).
✅ Need to disclose additional tax liability.
✅ Made errors in reporting TDS or advance tax payments.
Who Cannot File ITR-U?
🚫 You CANNOT file ITR-U if:
❌ You have already filed ITR-U for that year.
❌ You are under an income tax survey, investigation, or scrutiny.
❌ Your original ITR contains fraudulent or false information.
❌ Your ITR has been selected for assessment or reassessment.
❌ You want to claim a refund or reduce your tax liability.
❌ The ITR filing deadline has already expired.
How to File ITR-U?
You can file ITR-U online on the Income Tax e-filing portal (eportal.incometax.gov.in) by following these steps:
🔹 Step-by-Step Process
1️⃣ Log in to the e-filing portal using your PAN and password.
2️⃣ Go to "File Income Tax Return" and select Assessment Year.
3️⃣ Choose ITR-U (Updated Return).
4️⃣ Enter the correct details for income, deductions, and tax liability.
5️⃣ Pay additional tax, if applicable.
6️⃣ Submit the form and verify using Aadhaar OTP, net banking, or digital signature.
When Can You File ITR-U?
🔹 Previously, the time limit for filing ITR-U was 2 years from the relevant assessment year. However, as per Budget 2025, this has been extended to 4 years, effective April 2025.
Example:
- If you missed filing ITR for FY 2022-23 (AY 2023-24), you can now file ITR-U until March 31, 2027.
- If you made an error in FY 2023-24 (AY 2024-25), you can correct it until March 31, 2028.
🚨 Important: ITR-U can be filed only once for a particular assessment year, so ensure all corrections are included before submission.
Additional Tax on ITR-U Filing
If you are filing ITR-U to report additional income, you need to pay an extra tax as per the following slabs:
| Time Period (from due date of original ITR) | Additional Tax Payable |
|---|---|
| Within 12 months (1 year) | 25% of additional tax |
| 12-24 months (2 years) | 50% of additional tax |
| 24-48 months (4 years, from April 2025) | (Yet to be defined by IT Dept.) |
Why File ITR-U?
✔️ Avoid Notices & Penalties – If you receive a tax notice for underreporting income, filing ITR-U can help you rectify it before action is taken.
✔️ Stay Compliant – Filing an updated return ensures you meet tax regulations and avoid legal trouble.
✔️ Fix Errors & Omissions – If you forgot to report income or claim deductions, ITR-U allows you to correct it hassle-free.
✔️ Extended Time Frame – With the new 4-year limit, you get ample time to correct mistakes.
Conclusion
ITR-U is a lifeline for taxpayers who have missed deadlines or made mistakes in their tax returns. With the extended 4-year period from April 2025, it offers more flexibility to correct errors. However, it cannot be used for refund claims or fraudulent filings.
💡 Pro Tip: If you realize an error in your ITR, file ITR-U as soon as possible to avoid paying higher penalties. Always consult a tax expert before filing an updated return.
📢 Stay tax-compliant and avoid unnecessary penalties with ITR-U! 🚀
