Mumbai, May 20: Following changes made in the Budget 2025, the Central Board of Direct Taxes (CBDT) has introduced the new Income Tax Updated Return form, known as ITR-U. The updated filing rules, effective from April 1, 2025, are aimed at encouraging voluntary tax compliance. One of the most significant changes is the extension of the time limit for filing the updated returns from 24 months to 48 months. Meaning, taxpayers can now revisit and correct their filings for assessment years 2021-22 through 2024-25.

However, it is to be noted that an extended window to file the updated return comes with stricter penalties, with an additional tax rate ranging from 25 per cent to 70 per cent depending on the duration of delay. While the broader window offers flexibility, taxpayers must meet specific conditions to avail of this option. With this new version in place, let’s know who can file updated returns under the new ITR-U, last date of filing updated returns and the penalty for missing the deadline. ITR Filing 2025: Who All Need To File Their Income Tax Return by July 31? Check Details.

Who Can File the New ITR-U?

As per the new ITR-U, any taxpayer, regardless of whether or not they originally filed a return for a specific assessment year, is eligible to file an updated return. However, this only applies to those who meet certain conditions outlined by the CBDT under the new ITR-U. The form is primarily meant for those who wish to correct errors or omissions in their originally filed income tax returns for up to four assessment years starting from 2021-22 to 2024-25. It also includes those taxpayers who missed reporting some income, selected incorrect income heads, or paid tax at the wrong rate.

Notably, even if the taxpayer did not file their original return earlier, they can now use ITR-U to disclose their income and pay the applicable tax, along with interest and penalty. However, the updated return cannot be used to declare a loss, increase a refund, or reduce the taxable income reported in the earlier return. ITR-1 and ITR-4 Released for AY 2025–26: Salaried Taxpayers Can Report Capital Gains Up to INR 1.25 Lakh in Simplified Forms, Check Other Key Changes.

Conditions Under Which ITR-U Can Not Be Filed:

 

  • ITR-U cannot be filed if the updated return results in a lower tax liability than previously declared or claims a refund of excess taxes paid.

  • Taxpayers are not allowed to file ITR-U to declare losses or to carry forward losses under any head of income.

  • If a reassessment, search, survey, or prosecution is initiated for the relevant year, filing ITR-U is not permitted.

  • If a notice has been issued under Section 148A and 36 months have passed since the end of the assessment year, ITR-U cannot be filed, unless the assessing officer concludes that reassessment is not required.

  • An updated return can be filed only once for a particular assessment year. If it has already been filed, it cannot be revised again using ITR-U.

  • ITR-U cannot be used if the income pertains to undisclosed assets or income under laws like the Prohibition of Benami Property Transactions Act or the Prevention of Money Laundering Act.

Last Date for ITR-U Filing

The last date to file ITR-U (Updated Income Tax Return) depends on the financial year (FY) for which the return is being filed. As per the new rules effective from April 1, 2025, taxpayers now have 48 months (4 years) from the end of the relevant assessment year (AY) to file the updated return. For instance,

  • The last date to file ITR-U is March 31, 2030, for AY 2025-26 (income earned in FY 2024-25).

  • For AY 2024-25, the deadline is March 31, 2029.

  • For AY 2023-24, it is March 31, 2028.

  • For AY 2022-23, the deadline is March 31, 2027.

Penalty for Missing ITR-U Deadline

As mentioned before, filing the ITR-U comes with a penalty in the form of additional tax on the total tax and interest payable. If the ITR-U is filed within 12 months from the end of the relevant assessment year, a 25% additional tax is levied. This increases to 50% if filed between 12 and 24 months, 60% if filed between 24 and 36 months, and 70% if filed between 36 and 48 months. The higher the delay, the greater the additional tax burden, making timely filing crucial for taxpayers.

 

 

(The above story first appeared on LatestLY on May 20, 2025 05:08 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).