Updated Return of Income (ITR-U): Key Guidelines for Taxpayers

The Updated Return of Income (ITR-U) is a provision under Section 139(8A) of the Indian Income Tax Act that allows taxpayers to rectify errors, add unreported income, or file a return if they missed the original and belated deadlines. This facility promotes voluntary compliance by providing an extended window to correct errors. But, it requires the payment of additional tax.

It can be filed by any person, except in a few situations, no matter if they have earlier filed an original, belated or revised return for the relevant assessment year.

When can an updated return be filed?

You are generally allowed to file an updated return if you later realise that the income tax return you filed earlier was incomplete or had mistakes, or you forgot to report something.

You can file an updated return in most cases, except a few special situations (like if the tax department is already checking your return in detail or if certain legal actions are happening).

The time limit for filing of updated return

The time limit provided for filing an updated return is 48 months from the end of the relevant assessment year. In the financial year 2025-26, a person can file an updated return for AY 2024-25, 2023-24, 2022-23, and 2021-22.

Form for filing an updated return

To file an updated return, the taxpayer must use the same ITR form that normally applies to them, such as ITR-1, ITR-2, etc. However, while filling this form, they also need to complete two additional sections- Schedule Part A Gen_139 (8A), which captures details related to the updated return.

Manner of furnishing an updated return

An updated return will be filed electronically under the Digital Signature Certificate (DSC) in the case of the following taxpayers:

a. Company

b. Political Party

c. Any person

whose accounts are required to be audited under Section 44AB of the Income-tax Act except person filing return in ITR-7. For other taxpayers, the updated return will be filed electronically either under Digital Signature Certificate or under Electronic Verification Code (EVC).

Reporting in ITR while filing an updated return

When a person files an updated return, he has to fill in some extra details in the ITR form. These details are given in two sections: Schedule Part A Gen_139(8A) and Part B ATI. The details that need to be provided include:

• Basic information like PAN, name, and Aadhaar number
• Details of any earlier return filed, such as the section, ITR form used, acknowledgement number, and date of filing
• Confirmation that the person is eligible to file an updated return
• The ITR form chosen for filing the updated return
• The reason for filing the updated return
• Whether the updated return is being filed within 12 months, 12-24 months, 24-36 months, or 36-48 months from the end of the assessment year
• Whether the updated return reduces any carried-forward losses, unabsorbed depreciation, or tax credit, and if yes, which years are affected and whether revised/updated returns were filed for those years
• Details of the extra income being reported now and the tax calculated on it
• Details of tax payments made specifically for the updated return
• Information about advance tax, self-assessment tax, or regular assessment tax paid earlier but not claimed before relief under section 89 if it was missed in the earlier return.

When can an updated return not be filed?

An updated return of income (ITR-U) cannot be filed under several specific circumstances. Following are some circumstances:

• If an updated return is a return of loss

An updated return cannot be filed if your total income becomes a loss. But you can file an updated return even if you have a loss under the head of income (like house property or business), as long as your overall total income is still positive.

• If an updated return results in lower tax liability
• An updated return cannot be filed if it results in lowering the tax that was already calculated in your earlier return.
• If an updated return results in an increase in the refund

An updated return cannot be filed if it leads to getting a refund or increases the refund you were earlier supposed to receive.

• If a search is initiated against the assessee

An updated return cannot be filed for the assessment year in which the Income Tax Department conducts a search under section 132, or for any year before that.

• If books of account or other documents or any assets are requisitioned

An updated return cannot be filed for the assessment year in which the tax department takes documents or assets through a requisition under section 132A, or for any year before that.

• If a survey is conducted against the assessee

An updated return cannot be filed for the year in which the Income Tax Department conducts a survey under section 133A, or for any earlier year. But this restriction does not apply if the survey was only related to TDS or TCS.

• If documents or assets are seized or requisitioned in the case of any other person belonging to the assessee

A person cannot file an updated return if:

1. any cash, gold, jewellery, or valuable items taken by the tax department during a search on someone else, if those items actually belong to him; or
2. any account books or documents taken by the tax department during a search on someone else, if those records or the information in them are connected to him.

In these situations, the person cannot file an updated return for the year in which the search or requisition happened, or for any year before that.

• If the updated return has already been filed

An updated return cannot be revised, as it can be filed only once for any particular assessment year.

• If the assessment is pending or completed

A taxpayer cannot file an updated return for a year if the assessment, reassessment, recomputation, or revision for that year is either still pending or has already been completed.

• If AO has information about the assessee under Specified Acts

A person cannot file an updated return for a year if the tax officer already has certain information about him under specific laws, and the officer has informed him of this before he tries to file the updated return:

1. Prevention of Money Laundering Act, 2002
2. Black Money Act, 2015
3. Benami Property Act, 1988
4. Smugglers and Foreign Exchange Manipulators Act, 1976

• If AO has information about the assessee under DTAA or TIEA

If the tax department receives information about a person for a particular year from another country under a Double Taxation Avoidance Agreement (DTAA), the person cannot file an updated return for that year, as long as the department has informed him about this before he tries to file the updated return.

• If any prosecution proceeding is initiated

If the government has already started criminal/legal action against you for a particular tax year, you cannot file an updated return for that same year.

• If a show cause notice under section 148A

If you get a 148A notice after 3 years from that tax year, you cannot file an updated return. But if the officer later decides your case should not be reopened, then this restriction doesn’t apply.

• In other notified cases

If the Central Board of Direct Taxes (CBDT) has listed certain people who are not allowed to file updated returns, then those people cannot file an updated return.

• Curative Updated Return of Subsequent Years

If you file an updated return for an earlier year and it reduces your carried-forward loss,unabsorbed depreciation, MAT credit, or AMT credit, then you must also file updated returns for every later year that used those reduced amounts.

Tax on updated return

When you file an updated return, you must pay all the required amounts of tax, interest, fees, and the extra tax and attach proof of payment.

If you don’t, the updated return will be considered defective (not valid).

• Computation of tax, interest, and fee on the updated return where no return was filed earlier

If you didn’t file your original or belated return for that year, then while filing an updated return, you must first pay the full tax, the late fees, the interest for delay, the interest for not paying advance tax on time, and the additional tax. All these payments must be made before submitting the updated return.

(a) Self-assessment tax:

Self-assessment tax for the updated return will be calculated after considering all the necessary adjustments, like taxes already paid, TDS/TCS, advance tax, reliefs, and any other eligible deductions.

(b) Interest under section 234A:

• When you file an updated return, interest under Section 234A is calculated on the self-assessment tax for that return.
• The interest is charged from the day after the original return was due until the day you file the updated return.
• However, no interest is charged on the extra (additional) income tax you pay with the updated return.

(c) Interest under section 234B:

• When you file an updated return, you may have to pay interest under Section 234B on the tax shown in the updated return (after adjusting TDS, TCS, reliefs, or credits).
• The interest is calculated from April 1 of that assessment year until the date you pay the tax before filing the updated return.
• If you pay the tax in parts, interest is calculated separately for each part for the period it was unpaid.

(d) Interest under section 234C:

• Section 234C charges 1% interest per month if you pay less than the required advance tax in each instalment.
• The shortfall is calculated based on the tax on your returned income.
• For an updated return, the income shown in the updated return is treated as the returned income for calculating this interest.

(e) Fee under section 234F:

If you file your income tax return after the original due date, you have to pay a late fee under Section 234F.

(f) Additional tax on updated return:

If you file an updated return after the due date for a belated or revised return but within 12 months after the end of that tax year

• You have to pay an additional tax equal to 25% of the total tax and interest payable on the updated return.
• If you file an updated return between 12 and 24 months after the end of the tax year, you have to pay an additional tax equal to 50% of the total tax and interest due.
• If you file an updated return between 24 and 36 months after the end of the tax year, you have to pay an additional tax equal to 60% of the total tax and interest due.
• If you file an updated return between 36 and 48 months after the end of the tax year, you have to pay an additional tax equal to 70% of the total tax and interest due.

When calculating the additional tax on an updated return, the term “tax” includes surcharge and cess. Any interest already paid with the earlier return is subtracted from the interest before computing the additional tax.

• Computation of tax, interest and fee on the updated return where a return was filed earlier

If you have already filed the original, belated, or revised return for a year, then while filing an updated return, you must pay the self-assessment tax shown in the updated return along with interest for any delay in advance tax, after reducing the interest already paid with the earlier return. In addition, the additional income tax must be paid before submitting the updated return.

(a) Self-assessment tax:

The self-assessment tax will be computed after taking into account the following:

• When calculating self-assessment tax for an updated return, you should consider:
• Taxes or credits already used in the earlier return, and
• Taxes or credits not claimed earlier.
• Also, if you received a refund from the earlier return, that amount is added to the tax payable in the updated return.

(b) Interest under section 234A:

If you have already filed the original, belated, or revised return for a year, you don’t have to pay interest under Section 234A when filing the updated return.

(c) Interest under section 234B:

If you have already filed the original, belated, or revised return and then file an updated return, interest under Section 234B will be calculated on the assessed tax when you file the updated return.

When filing an updated return, you may have to pay interest under Section 234B on the assessed tax from April 1 of that assessment year until the date you pay the tax before submitting the return. If the tax is paid in parts, interest is calculated separately for each part for the period it remained unpaid. No interest is charged on the additional income tax under Section 140B, and any interest already paid with an earlier return is subtracted from the interest due.

(d) Interest under section 234C:

Interest under Section 234C is calculated based on the income shown in the updated return. Any interest you already paid with an earlier return is subtracted from this amount.

(e) Fee under section 234F:

If you have already filed the original, belated, or revised return for a year, you don’t have to pay the late fee under Section 234F when filing the updated return.

(f) Additional tax on updated return:

The additional tax you pay on an updated return depends on how late you file it after the end of the tax year:

• If you file an updated return after the due date for a belated or revised return but within 12 months after the end of the tax year, you have to pay an additional tax equal to 25% of the total tax and interest due.
• If you file an updated return between 12 and 24 months after the end of the tax year, you have to pay an additional tax equal to 50% of the total tax and interest due.
• If you file an updated return between 24 and 36 months after the end of the tax year, you have to pay an additional tax equal to 60% of the total tax and interest due.
• If you file an updated return between 36 and 48 months after the end of the tax year, you have to pay an additional tax equal to 70% of the total tax and interest due.

When calculating any additional income tax you owe, you need to include not just the basic tax but also surcharge and cess. If you are required to pay interest on the extra tax, you can reduce it by the interest you already paid when you filed your previous return.