What is ITR-U?

ITR-U form, or the Updated Income Tax Return, is a provision that enables taxpayers to rectify mistakes or omissions in their previously filed returns. This form also allows individuals to file a return if they missed the original and belated return filing deadlines. The concept of updated returns was introduced in the Union Budget 2022 to promote voluntary tax compliance.

Budget 2025 Update

As per the latest announcement in Budget 2025, the deadline for taxpayers to submit an updated return (ITR-U) has been extended from two years to four years from the end of the relevant assessment year (AY). This extension aims to ease tax compliance by giving taxpayers more time to correct errors while ensuring a transparent taxation process. However, an additional tax must be paid when filing an ITR-U, calculated as follows:

Additional Tax Rates for ITR-U Form Filing

It is important to note that belated or revised returns cannot be filed after December 31st of the AY. However, ITR-U can be submitted starting from January 1st of the assessment year to rectify minor discrepancies. ITR-U cannot be used to claim refunds, increase losses, or reduce tax liability.

Who Can File ITR-U Form?

An individual or entity can file ITR-U under Section 139(8A) of the Income Tax Act if they need to correct any errors or omissions in the following types of returns:

• Original Return
• Belated Return
• Revised Return

Situations Where ITR-U Form Can Be Filed:

• Failure to file an income tax return within the due date.
• Incorrect disclosure of income details.
• Mistakenly selecting the wrong head of income.
• Incorrect tax rate applied while filing the return.
• Need to reduce carried-forward losses.
• Adjustment required for unabsorbed depreciation.
• Modification of tax credits under Section 115JB/115JC.

A taxpayer is allowed to file only one updated return per assessment year.

Who Cannot File ITR-U?

ITR-U form cannot be filed in the following cases:

• An updated return has already been submitted for the same assessment year.
• Filing of a nil return or a loss return.
• Attempting to claim a refund or increase the refund amount.
• If filing an updated return would lower tax liability.
• When tax authorities have initiated a search under Section 132.
• If a survey under Section 133A has been conducted.
• When books, documents, or assets have been seized under Section 132A.
• If  assessment/reassessment/revision/re-computation is already underway or completed.
• If no additional tax liability exists after adjusting TDS, losses, or other credits.

Note: If an updated return results in a reduction of carried-forward loss, unabsorbed depreciation, or tax credit, an updated return must be filed for each affected assessment year.

Time Limit to File ITR-U form

The deadline for submitting an updated return is within 48 months (4 years) from the end of the relevant assessment year.

How to File ITR-U?

The updated return (ITR-U) must be submitted along with the applicable ITR form (ITR-1 to ITR-7). The form consists of two sections:

Part A: General Information

Personal & Filing Details

• A1: PAN
• A2: Name
• A3: Aadhaar Card Number
• A4: Assessment Year
• A5: Select Yes if you filed the return previously for the assessment year.
• A6: If Yes, check the ITR acknowledgement to determine if it was filed u/s 139(1) or other sections.
• A7: Enter the form number, acknowledgment number, and date (DD/MM/YYYY) of filing the original return (found in the ITR acknowledgement).
• A8: Verify eligibility conditions and select the appropriate option.
• A9: Select the correct ITR form number.
• A10: Choose at least one reason for updating the ITR-U (multiple selections allowed).
• A11: If 12 months have elapsed since the end of the financial year, select ‘12-24 months’; otherwise, choose ‘up to 12 months’.
• A12: If the updated return impacts carried-forward losses or unabsorbed depreciation, mention the affected assessment year and whether a revised/updated return was previously filed.

Part B: Computation of Updated Income and Tax Payable

• Declare additional income for each income head (detailed breakdown not required).
• Enter income declared in the last return.
• Total income (as per Part B-TI of the filed ITR form).
• Tax payable amount (from Part B-TT of the ITR form).
• Amount refundable, if applicable.
• Tax paid as per last return (including any refund claimed/received with interest).
• Late filing fee, if applicable.
• Regular assessment tax paid in the last return.
• Aggregate liability on additional income.
• Additional tax liability (25% or 50% of the computed amount).
• Net tax payable.
• Self-Assessment Tax (u/s 140B) – Pay the tax and enter the challan details.

How to Verify ITR-U?

ITR-U must be verified using one of the following methods:

• Aadhaar OTP
• Electronic Verification Code (EVC)
• Digital Signature Certificate (DSC) (mandatory for tax audit cases)

How to Compute Tax Payable for ITR-U?

Total tax liability when filing ITR-U is calculated as follows:

Total Tax Liability = Tax Payable + Interest + Late-Filing Fees + Additional Tax

Net Tax Liability = Total Tax Liability – (TDS/TCS/Advance Tax/Tax Relief)