Missing income on your tax return can cause a problem later. But there is a legal way to fix some mistakes even after the normal return filing window has closed.
The Updated Income Tax Return, also called ITR-U, allows eligible taxpayers to update income or correct certain details in an earlier return. The rules have also changed, with the law now permitting an updated return for a longer period in eligible cases.
Who can file ITR-U? Are there any limitations? And how much more tax do you have to pay?
Let’s keep it simple.
What Is ITR-U?
ITR-U is the Updated Income Tax Return filed under Section 139(8A) of the Income-tax Act.
It gives taxpayers another opportunity to report income that was missed, correct certain errors, or update information in an earlier return. The current ITR-U form allows an updated return within 48 months from the end of the relevant assessment year, subject to the conditions in the law.
For example, you may have:
- Failed to report some income.
- Reported income under the wrong head.
- Reported a loss incorrectly.
- Claimed a tax credit incorrectly.
- Used the wrong tax rate.
- Failed to file an original return.
However, ITR-U isn’t a replacement for a revised return. It has separate conditions and an additional tax cost.
Who Can File ITR-U?
A taxpayer may file an updated return if the case meets the conditions under Section 139(8A).
The current ITR-U form covers cases where the taxpayer wants to update income or losses and asks the filer to confirm eligibility before submission.
Common situations include:
- A return was not filed earlier.
- Some income was not reported.
- Income was reported under the wrong head.
- Loss was reported incorrectly and needs to be reduced.
- Carried-forward loss needs to be reduced.
- Unabsorbed depreciation needs to be reduced.
- Tax credit under certain provisions needs correction.
- The wrong rate of tax was used.
The form also provides a field for certain returns filed in response to a notice under Section 148, so the exact facts of the case should be checked before filing.
Who Can not File ITR-U?
ITR-U comes with important restrictions. You shouldn’t assume that every mistake can be corrected through an updated return.
For instance, an updated return cannot be used where it:
- Reports a loss.
- Reduces the total tax liability compared with the earlier return.
- Creates a refund.
- Increases the refund already due.
The Income Tax Department has also listed restrictions linked to certain search, survey and other proceedings.
So, check the eligibility conditions before preparing the form. Filing the wrong type of return can create another tax issue.
What Are the Benefits of ITR-U?
The main benefit is the chance to correct eligible tax information after the normal filing and revision periods have passed.
1. You can report missed income
If you forgot to include taxable income in an earlier return, ITR-U can provide a route to disclose it, subject to the legal conditions.
2. You can correct certain mistakes
An updated return can address specific errors, such as wrong income heads, incorrect losses or certain tax credit details.
3. It can improve tax compliance
Correcting an earlier return voluntarily can help you bring your tax records in line with your actual income.
4. The filing window is longer
The current framework allows eligible taxpayers to file an updated return up to 48 months from the end of the relevant assessment year.
That’s useful when a mistake comes to light much later.
How Much Additional Tax Is Payable on ITR-U?
ITR-U isn’t free from an additional tax perspective.
The Income Tax Department states that additional tax applies at different stages of the updated-return period. The rates are 25%, 50%, 60% and 70%, depending on when the ITR-U is filed.
| Time of filing ITR-U | Additional tax |
| Up to 12 months | 25% |
| More than 12 months to 24 months | 50% |
| More than 24 months to 36 months | 60% |
| More than 36 months to 48 months | 70% |
The additional tax is calculated along with the tax and interest payable as required under the applicable provisions.
Don’t wait without a reason. The longer you wait, the higher the additional tax may become.
How to File ITR-U
The filing process starts with checking whether you’re eligible.
Step 1: Check your earlier return
Find out whether you filed an original or revised return for the relevant assessment year. Keep the acknowledgement number and filing date ready where applicable.
Step 2: Check your income records
Compare your return with documents such as Form 26AS, AIS, TIS, Form 16, bank statements and other income records.
Step 3: Work out the additional tax
Calculate the tax and interest payable, along with the applicable additional tax for the period in which you’re filing.
Step 4: Select the correct ITR form
ITR-U works with the applicable ITR form. The Income Tax Department provides updated-return utilities for different ITR forms, including ITR-1, ITR-2, ITR-3 and ITR-4 for relevant assessment years.
Step 5: Submit and verify
Complete the return using the applicable filing facility, pay the required amount and submit the return. Follow the verification requirements shown on the income-tax e-filing portal.
ITR-U vs Revised Return
ITR-U and a revised return serve different purposes.
A revised return under Section 139(5) is generally used to correct an eligible return within the permitted revision period. An ITR-U under Section 139(8A) is meant for eligible cases where an updated return can be filed under the specific conditions of that section.
The tax cost is also different. ITR-U can involve additional tax, so taxpayers should first check whether a revised return is still available before relying on an updated return.
What Documents Are Needed for ITR-U?
Keep your records ready before filing. Depending on your income and the reason for updating the return, these may include:
- PAN and Aadhaar details
- Original ITR acknowledgement
- Form 16
- Form 26AS
- Annual Information Statement (AIS)
- Taxpayer Information Summary (TIS)
- Bank statements
- Capital gains statements
- Details of deductions and tax payments
- Other documents supporting the corrected income
The exact documents will depend on your income sources and the changes being made.
Conclusion
ITR-U gives eligible taxpayers a way to correct certain tax information and report missed income after the normal filing route has closed. But it comes with strict conditions and an additional tax cost.
Before filing, check your eligibility, compare your income records and calculate the full tax liability. If the amount involved is significant or your case involves notices or complex income, get professional tax advice before submitting the updated return.
Frequently Asked Questions
What is ITR-U in income tax?
ITR-U means Updated Income Tax Return. It is filed under Section 139(8A) to update an eligible income-tax return or report income in certain cases after the normal filing route is no longer available.
Can I file ITR-U if I forgot to report income?
Yes, an eligible taxpayer may use ITR-U to report previously unreported income, subject to the conditions and restrictions under Section 139(8A). Additional tax and interest may apply.
What is the last date for filing ITR-U?
Under the current rules, an updated return can be filed within 48 months from the end of the relevant assessment year, provided the taxpayer meets the applicable conditions.
Can ITR-U increase my refund?
No. ITR-U cannot be used where the updated return results in a refund or increases an existing refund.
Is additional tax payable on ITR-U?
Yes. Additional tax can apply based on how long after the end of the relevant assessment year you file the updated return. The current rates range from 25% to 70% across the four filing periods.
Can I file ITR-U if I have not filed original ITR?
Yes. If no original return was filed earlier, you can file ITR-U subject to fulfilling the eligibility conditions as per Section 139(8A) and paying the applicable tax, interest and additional tax.
Can ITR-U reduce a loss?
Yes. Loss reported in earlier return can be set off against updated return subject to conditions under section 139(8A). But ITR-U cannot be used to report or increase loss.
What will happen if I file ITR-U after 24 months?
The extra tax applicable is more if you file ITR-U after 24 months from the end of the relevant assessment year. The rate is 60% if you file after 24 months but before 36 months, and 70% if you file after 36 months but before 48 months.
Can ITR-U be filed after getting an income tax notice?
The answer will depend on the type of notice and the facts of the case. The ITR-U form also has stipulations for certain returns filed under a notice issued under Section 148, hence, you must check the relevant conditions before filing.
Is ITR-U applicable for every assessment year?
The ITR-U can be filed within the time allowed under Section 139(8A) which at present allows an eligible updated return to be filed up to 48 months from the end of the relevant assessment year. Specific eligibility requirements still need to be met before filing.
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