Missed reporting some income or made an error in your tax return? You are not alone, and more importantly, it’s not too late to fix it. With the March 31 deadline approaching, taxpayers still have a window to correct their filings using the Updated Income Tax Return, or ITR-U.
The ITR-U is a provision under Section 139(8A) of the Income Tax Act that allows taxpayers to update their returns. It can be used to correct mistakes, disclose missed income or even file a return if you skipped it earlier.
This option remains open for up to 48 months from the end of the relevant assessment year. For instance, for AY 2021–22, the deadline is March 31, 2026, while for AY 2025–26, it extends to March 31, 2030. However, the sooner you act, the lower the extra tax you pay.
Any taxpayer can file an Updated Income Tax Return (ITR-U) within 48 months from the end of the relevant assessment year. This option is available whether or not the person has already filed an original, revised or belated return. If a return has been filed earlier, the acknowledgement number must be mentioned while submitting the updated return.
However, there are certain restrictions. An ITR-U cannot be filed if it is a nil or loss return, or if it reduces the total tax liability or leads to a higher refund. It is also not allowed in cases where a search or seizure has taken place, or where prosecution proceedings have already started.
The government has extended the time limit to file an updated return from two years to four years from the end of the relevant assessment year. This gives taxpayers more time to correct errors and voluntarily comply with tax rules, helping create a more transparent and efficient system.
At the same time, filing an ITR-U involves paying an additional tax along with the regular tax and interest. The amount increases with delay. If the updated return is filed within 12 months, an additional 25% of the tax and interest is payable. This rises to 50% if filed within 24 months, 60% within 36 months, and 70% if filed between 36 and 48 months.
Meanwhile, review your tax filings and fix any errors now. Waiting longer could mean paying significantly more, or facing unnecessary legal hassle later.