Income tax dept notifies new ITR-U form: Know who can file updated returns

The Central Board of Direct Taxes (CBDT) has notified the new Income Tax Updated Return form, known as ITR-U. The form comes with changes introduced in Budget 2025 and is effective from April 1, 2025.

The biggest change is that taxpayers now have 48 months to file updated returns. The Finance Act, 2025 extended the time limit from the earlier 24 months.

This means you can now file updated ITRs for assessment years 2021-22, 2022-23, 2023-24, and 2024-25.

However, filing late comes at a cost. If you file the updated return in the first year after the due date, you must pay 25% additional tax on the tax amount and interest. If you file in the second year, the extra tax rises to 50%.

Filing in the third year attracts 60% extra tax, while in the fourth year, the additional tax increases to 70%.

The new rules also set specific deadlines.

For income earned in the financial year 2023-24, the updated return must be filed by March 31, 2029. For FY 2022-23, the deadline is March 31, 2028. For FY 2021-22, it is March 31, 2027, and for FY 2020-21, the last date is March 31, 2026.

The government has also amended Section 139(8A) of the Income Tax Act.

Under the revised rule, taxpayers cannot file ITR-U if a show-cause notice under Section 148A is issued after 36 months from the end of the assessment year. However, if the assessing officer passes an order under Section 148A(3) saying the case does not qualify for reassessment, you can still file ITR-U within 48 months.

Section 140B has been updated to include the higher tax rates applicable for delayed filings. Rule 12AC has also been modified to incorporate all the changes in the ITR-U process.

Some key conditions remain. Taxpayers cannot claim refunds or carry forward losses through ITR-U. They also cannot reduce the income declared in an earlier filed return. In addition, if the income tax department has already opened your case, you cannot file an ITR-U for that year.

Source: CNBC TV18