Taxpayers can now file updated income tax returns (ITR-U) in ITR-1 and ITR-2 for the assessment years (AY) 2021-22 and 2022-23 as per the Finance Act, 2025. The Income Tax Department has now made available corresponding utilities for ITR-U in ITR-1 and ITR-2 for AY 2021-22 and 2022-23.
In the Union Budget 2025, the Centre announced a rule saying that taxpayers would now get up to 48 months from the end of the relevant assessment year to file ITR-U under Section 139 (8A) of the Income Tax Act.
The government move is aimed at allowing more time to individuals to fix errors or omissions in their income tax returns filed previously. That said, the Income Tax Department has a set of guidelines on ITR-U filing, like who can file an updated income tax return and when.
Tax dept notified new ITR-U form in May this year
The Central Board of Direct Taxes (CBDT) notified a new ITR-U form to help assessees rectify errors and omissions in previously filed returns.
In this year’s Budget, the government amended the filing rules for ITR-U. The new filing rules have been effective from April 1, 2025. The concept of ITR-U form was, however, brought three years ago in the Union Budget 2022.
What is ITR-U?
As said above, the ITR-U form was introduced to rectify errors or omissions in previously filed ITR. This ITR form can also be used in case of a missed income tax return where the taxpayer fails to file it within the due date and the belated/revised return deadline.
Earlier, the income tax rule allowed taxpayers to file ITR-U within two years from the end of the relevant assessment year. This time limit now has been increased to 48 months.
For instance: For Assessment Year 2023-24, if the taxpayer missed filing ITR or the belated/revised return, they have a chance to still file ITR-U from 1st January 2024 to 31st March 2026.
Additional tax payable for filing ITR-U
If the updated return is filed within 12 months from the end of the assessment year, 25% additional tax on the aggregate tax and interest has to be paid. If the updated return is extended to 24 months, the additional tax amount to be levied is 50%. If this time is between 24 months and 36 months, the additional tax is 60%. In case the updated tax return is filed between 36 months and 48 months, 70% of the additional tax will be levied.