The Central Board of Direct Taxes (CBDT) has notified a fresh version of Form ITR-U, giving taxpayers more room and clearer directions to rectify past mistakes or missed filings in their income tax returns. An Updated Income Tax Return (ITR-U) form is used by individuals who need to update an earlier filed ITR due to any errors or need to file any missed return. In plain terms, if you have missed reporting some income or failed to file your return in previous years, this updated form gives you a second (or third) chance, but at a cost that rises with delay.
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In a circular issued on May 19, the Income Tax Department has notified the new ITR-U forms and here’s what taxpayers should take note of before filing their returns.
What has changed?
The revised ITR-U form, which falls under Section 139(8A) of the Income Tax Act, will now allow individual taxpayers or entities to file their updated returns up to 48 months after the end of the relevant assessment year.
Earlier, the time window was much shorter, which made it difficult for some taxpayers to correct any omissions or oversights in the return.
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The new changes were brought in the Finance Act, 2025.
The deadline shift, though a noteworthy one, is not the only change in this form. The form itself has been restructured a little to include detailed reporting fields.
To summarise it simply, the taxpayers will now need to provide:
- Head-wise income details
- Revised tax calculations
- And confirmation of payments made
The form further requires you to specify why the update is being made, whether it is due to missed income, incorrect classification of income, or revision of carried-forward losses.
Will Filing Late Cost You?
Yes, as per the new update, along with its flexibility of time, filing an updated return now comes with a stiffer penalty structure. Here’s how:
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If you are filing in the third year after the assessment year, you will now need to pay 60 per cent additional tax on the amount of tax due. Wait until the fourth year, and that jumps to 70 per cent. These changes have been made by amending Section 140B, which details additional income tax on updated returns.
Moreover, the revised rules also tweak Section 139(8A) to specify when a taxpayer is ineligible to file an updated return. If a notice under Section 148A, a show-cause notice before reassessment has already been issued after 36 months from the end of the assessment year, the taxpayer can no longer file ITR-U.
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But you should note that in case the notice is eventually dropped and no reassessment is initiated, you will get back the window to file ITR-U within the extended 48 month period.
The rules under Rule 12AC have also been updated to reflect these changes.
About ITR-U Form
The Updated Income Tax Return Form was first introduced in 2022 to help the government widen the tax base by encouraging voluntary compliance from taxpayers.
With the latest update, the CBDT is allowing more time to comply while also making it clear that delay will come with a price.
For those who have missed declaring income or filing returns in the last few years, this is a window to set things straight.
