Taxpayers Can Now File Updated ITR (ITR-U) for Up to 4 Years
The Central Board of Direct Taxes (CBDT) has notified a new ITR-U form under the proposed amendments of Budget 2025, allowing taxpayers to file an updated income tax return up to four years after the end of the assessment year.
What Is ITR-U?
ITR-U is designed for individuals who either failed to file their Income Tax Return (ITR) on time or filed it with mistakes such as underreporting income or using the wrong tax head or rate.
Who Can File ITR-U?
- People who did not file their ITR on time.
- Those who underreported their income or used the wrong heads of income or tax rate.
- If a return was filed earlier, the acknowledgment number must be provided while filing ITR-U.
When Can You File ITR-U?
ITR-U can only be filed after the end of the relevant assessment year. For example, for FY 2024–25, the normal ITR due date is July 31, 2025. If the return is not filed by December 31, 2025, one can file ITR-U starting January 1, 2026.
New 4-Year Time Limit
Previously, the time limit for filing ITR-U was 24 months. Now it has been extended to 48 months (4 years) after the end of the assessment year. For instance, for FY 2024–25 (AY 2025–26), ITR-U can be filed until March 31, 2030.
Why ITR-U Matters
ITR-U provides a crucial opportunity for taxpayers to correct mistakes or file a missed return, reducing the risk of penalties or legal consequences. This promotes transparency and encourages responsible tax disclosure.
Penalty for Late Filing of ITR-U
Filing late ITR-U comes with additional fees based on the delay:
- Within 12 months: 25% extra on tax and interest due
- Between 12–24 months: 50% extra
- Between 24–36 months: 60% extra
- Between 36–48 months: 70% extra
Taxpayers must choose the correct time frame from a drop-down menu when filing. Verification is also mandatory just like with regular ITRs.