ITR-U Filing Deadline Looms: Final Opportunity to Rectify Errors Ahead of March 31

Updated Income Tax Return (ITR-U) Filing

Key Dates:

• For AY 2021-22, the deadline to file an Updated Return is March 31, 2026.
• For AY 2025-26, the deadline will be March 31, 2030.

What is ITR-U?

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The Updated Income Tax Return (ITR-U) is a provision under Section 139(8A) of the Income Tax Act that allows taxpayers to correct mistakes, disclose previously unreported income, or update an already filed return.

Key Changes in Budget 2026:

• ITR-U allowed during reassessment: Taxpayers can now file an updated return even after reassessment proceedings have started, attracting an additional 10 percent tax over and above existing penalties.
• Loss set-off now permitted: Taxpayers can now adjust losses while filing ITR-U, offering greater flexibility in tax calculations.

Penalties for Missing ITR-U:

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• Unlike a revised return, ITR-U is not a mandatory return and does not entail a penalty for missing to file.
• However, additional tax is payable over and above the regular tax payable under Updated Return, depending on the period within which ITR-U is filed.
• Penalties for missing ITR-U include:
  • Within 12 months from end of AY: 25 percent of additional tax + interest.
  • Between 12-24 months from end of AY: 50 percent of additional tax + interest.
  • Between 24-36 months from end of AY (if applicable): 60 percent of additional tax + interest.
  • Between 36-48 months from end of AY (if applicable): 70 percent of additional tax + interest.
• Missing ITR-U entirely risks notices under Section 147/148, best-of-judgment assessments, or penalties up to 200 percent of tax evaded.