Income Tax: ITR (U) filing deadline extended to 48 months – key details you must know

Income Tax filing: In Budget 2025, Finance Minister Nirmala Sitharaman suggested extending the timeframe for submitting revised income tax returns (ITRs) from two to four years. This adjustment provides taxpayers with additional time to address inaccuracies, disclose overlooked income, and adhere to tax regulations.

An updated tax return, filed as per Section 139(8A), permits taxpayers to correct omitted or inaccurate income declarations. It is applicable in cases where individuals did not submit a return despite surpassing the required threshold, excluded income, or misrepresented losses or refunds.

FM Sitharaman introduced the updated ITR facility in 2022 to encourage voluntary compliance among taxpayers who had previously omitted reporting their correct income. As a result, approximately 90 lakh taxpayers voluntarily updated their incomes by paying additional taxes. This positive response prompted the government to extend the timeframe during Budget 2025.

Key points to note after Budget 2025

> The government has proposed an extension of the time limit for filing an updated return from 24 months to 48 months from the end of the relevant assessment year.

> Section 139(8A) of the Act pertains to the submission of updated returns. Currently, updated returns can be submitted within 24 months from the end of the relevant assessment year. This provision incentivizes voluntary compliance by allowing for the payment of an additional income tax of 25% of the total tax and interest due for updated returns filed within 12 months from the end of the relevant assessment year.

> For updated returns filed after 12 months but within 24 months from the end of the relevant assessment year, the additional income tax is increased to 50% of the total tax and interest amount.

> As per the Budget Memorandum, “With a view to further nudging voluntary compliance, it is proposed to amend the said subsection so as to extend the time-limit to file the updated return from existing 24 months to 48 months from the end of relevant assessment year. Rate of additional income-tax payable for updated return filed after expiry of 24 months and upto 36 months from the end of the relevant assessment year shall be 60% of aggregate of tax and interest payable. The additional income-tax payable for updated return filed after expiry of 36 months and upto 48 months from the end of the relevant assessment year shall be 70% of aggregate of tax and interest payable.”

"In accordance with Section 139(8A) of the Income Tax Act, 1961 (herein after referred to as ‘IT Act’), every taxpayer whether or not they have furnished any original return or belated return or revised return would be eligible to furnish an updated return of income. Such updated return of income can be filed at any time after the end of the relevant assessment year but within 24 months from the end of the relevant assessment year in the Form ITR-U. For instance, with respect to Financial year 2023-24, a taxpayer can file an updated return on or before 31st March 2027," said CA (Dr.) Suresh Surana. 

What does this mean for taxpayers

The Finance Bill 2025 has now proposed to extend the period for filing of the Updated Tax Return. Pursuant to which the updated return can now be filed upto 48 months from the end of relevant assessment year, subject to payment of additional tax.

"Tax ranging from 25% to 70% of the tax and interest payable results in very steep overall tax incidence.  While the extended period would encourage compliance, it would have been better to keep the additional tax at 25%, which is adequate as a deterrent," Dr Surana added.

When submitting ITR-U, taxpayers are required to pay an extra tax based on the timing of the updated return filing. The rate of the additional tax depends on the number of months after the end of the relevant assessment year:

If ITR-U is filed within 12 months from the end of the relevant assessment year, 25% of tax plus interest is payable.
If filed within 24 months, 50% of tax plus interest is payable.
If filed within 36 months, 60% of tax plus interest is payable.
If filed within 48 months, 70% of tax plus interest is payable.

If the Updated return is filed	Additional Tax Liability
After expiry of the time available for Revised return and Belated return and before completion of 12 months from the end of the relevant assessment year	25% of aggregate of tax and interest payable
After the expiry of 12 months from the end of the relevant assessment year but before completion of the period of 24 months from the end of the relevant assessment year	50% of aggregate of tax and interest payable
After the expiry of 24 months from the end of the relevant assessment year but before completion of the period of 36 months from the end of the relevant assessment year	60% of aggregate of tax and interest payable on additional income disclosed in the updated ITR
After the expiry of 36 months from the end of the relevant assessment year but before completion of the period of 48 months from the end of the relevant assessment year	70% of aggregate of tax and interest payable on additional income disclosed in the updated ITR

 

To file your ITR-U, follow these steps:

Download Form ITR-U from the Income Tax Department’s website.
Log in to the e-filing portal and choose "Updated Return (ITR-U)".
Provide all required details, such as additional income and tax payable.
Calculate and settle any additional tax owed before submitting the form.
Submit the form and confirm the return using Aad OTP, net banking, or DSC. 

Who cannot file ITR-U:

Taxpayers are unable to submit ITR-U in the following situations:

Have already filed a revised return.
Filing a return with zero income or a loss.
Wishing to amend the refund amount.
The updated return shows a decrease in tax liability.
Subject to investigation or survey under Sections 132, 133A, or 132A.
Undergoing tax assessment or reassessment.
No additional tax is owed (offset by TDS or losses).