ITR-U Explained: How to File Updated Income Tax Returns in India (2025 Guide)

In today’s fast-evolving tax landscape, keeping your income tax records clean and up to date has become more important than ever. Mistakes can happen — income might be underreported, returns might not be filed at all, or you may realize later that you selected the wrong income head. To help taxpayers make amends without stepping into the legal grey zone, the Income Tax Department of India has introduced the ITR-U form.

In this detailed 2025 guide, we’ll walk you through everything you need to know about ITR-U — who can file it when to file, the extra tax amount you need to pay, and the steps to file your revised return through the online portal.

What is ITR-U?

The term "ITR-U" refers to the “Updated Income Tax Return” and is established under "Section 139(8A)" of the "Income Tax Act". This form gives taxpayers a second (or even third) chance to revise their tax returns by reporting additional income or correcting omissions, even if they didn’t file an original return at all.

What makes ITR-U particularly helpful is the extended timeline — taxpayers now have 48 months (four years) from the end of the relevant assessment year to file an updated return. This update, introduced through the Finance Act of 2025, marks a significant shift in India’s tax compliance ecosystem.

Who Can File an Updated Return?

The ITR-U is designed to accommodate taxpayers who may have:

• Failed to file their tax return for a particular financial year.

• Missed reporting some income.

• Reported income under the wrong head.

• Applied an incorrect tax rate.

However, there are certain limitations. You cannot file ITR-U to:

• Claim a refund.

• Declare losses for carry forward.

• Reduce tax liability from a previous return.

• File if assessment or reassessment proceedings for that assessment year have already started or been completed.

ITR-U vs. Other ITR Forms

Unlike ITR-1 to ITR-7, which are filed annually based on the nature of your income and entity type, ITR-U is specifically meant for correction after the original deadlines have passed.

If you’re unsure which form applies to you for regular returns, check out our earlier blog: ITR-3 Means in Income Tax: Everything You Need to Know.

Time Limit for Filing ITR-U

The beauty of ITR-U lies in its generous window. You now get 48 months to correct your return. Here's how it works:

• Assessment Year 2021–22 → Deadline: March 31, 2026

• Assessment Year 2022–23 → Deadline: March 31, 2027

• Assessment Year 2023–24 → Deadline: March 31, 2028

• Assessment Year 2024–25 → Deadline: March 31, 2029

This timeframe gives you enough breathing room to come clean on any financial slips.

What Are the Penalties?

Filing an updated return isn’t free of cost — and rightly so. You will be required to pay an additional tax based on how late you are filing your ITR-U:

• Within 12 months: 25% of the tax and interest due.

• 13 to 24 months: 50%

• 25 to 36 months: 60%

• 37 to 48 months: 70%

This additional tax ensures that the system is fair to those who filed accurately and on time.

Step-by-Step Guide to Filing ITR-U Online

Filing your ITR-U is straightforward if you follow the steps carefully:

Step 1: Visit the e-filing platform and sign in with your details.

Navigate to www.incometax.gov.in and use your PAN details to access your account.

Step 2: Navigate to the correct section

Go to the e-File tab > Select Income Tax Return > Choose Updated Return (ITR-U).

Step 3: Select the Assessment Year

Pick the relevant assessment year for which you want to file the updated return.

 Step 4: Choose the right ITR Form

Depending on your income source (salary, business, capital gains, etc.), select the applicable ITR form (e.g., ITR-1, ITR-3).

Step 5: Provide the necessary information under Part A and Part B of ITR-U

• Part A includes general information.

• Part B focuses on income details and the computation of additional tax.

Step 6: Make the Payment

The portal will calculate your additional tax liability. Pay the tax using the online payment gateway.

Step 7: Verification

Choose one of the options below to confirm your return.

• Aadhaar OTP

• Electronic Verification Code (EVC)

• Digital Signature Certificate (DSC)

After verification, file the return and save a copy for your reference.

Benefits of Filing ITR-U

Filing ITR-U offers multiple advantages:

• Peace of Mind: Correct any mistakes or missed income voluntarily.

• Avoid Future Penalties: Late disclosures discovered during scrutiny can lead to higher penalties or even prosecution.

• Compliance Score: Filing updated returns can improve your compliance score and help during visa applications or credit assessments.

• Reduced Litigation: Save yourself from long, drawn-out legal hassles by being proactive.

Common Mistakes to Avoid

Watch out for these typical errors during your ITR-U filing process.

• Trying to claim a refund — it’s not allowed via ITR-U.

• Declaring losses with the hope of future carry forward.

• Filing during ongoing scrutiny or reassessment proceedings.

• Missing the additional tax payment — your submission won’t be complete without it.

Final Thoughts

The introduction of ITR-U is a progressive move that encourages voluntary compliance and cleaner tax records. Whether you missed filing your return or made a genuine error, ITR-U gives you a fair chance to fix it.

Tax laws are becoming more taxpayer-friendly — but ignorance is no longer an excuse. Use the 48-month window wisely and avoid unnecessary stress or penalties. If you’ve just realized you made a mistake in your previous return, now’s the time to act.