Income Tax Department instructs taxpayers to file ITR-U before March 31

CHENNAI: The Income Tax Department has instructed the taxpayers to file updated Income Tax Return (ITR-U) for FY 2022-23 (AY 2023-24) before March 31, 2025.

If applicable, taxpayers can avail a lower additional tax of 25% and interest.

The deadline for taxpayers to file updated income tax returns has been extended from 2 years to 4 years from the end of the relevant assessment year.

The Updated Income Tax Return (ITR-U) is a form that allows taxpayers to update their ITRs by correcting errors or omissions or allows a taxpayer to file ITR if they have not filed ITR within the due date and also missed to file the belated return, within two years from the end of the relevant assessment year.

Section 139(8A) under the Income Tax Act allows you a chance to update your ITR within two years. Two years will be calculated from the end of the year in which the original return was filed. ITR-U was introduced to optimise tax compliance by taxpayers without provoking legal action.

For example, if you filed an ITR for AY 2023-24 and missed the revised/belated return filing window, you can file an ITR-U after the end of the assessment year, i.e. 31 March 2024 but within two years from there, i.e. 31 March 2026.

Tax implications based on timing

* Before March 31, 2025: 25% additional tax + interest

* After March 31, 2025: 50% additional tax + interest

An individual who has made an error or omitted certain income details in any of the following returns is eligible to file an updated return:

* Original return of income, or

* Belated return, or

* Revised return

An Updated Return can be filed in the following cases:

* Did not file the return.

* Missed return filing deadline and the belated return deadline

* Income is not declared correctly

* Chose wrong head of income

* Paid tax at the wrong rate

* To reduce the carried forward loss

* To reduce the unabsorbed depreciation

* To reduce the tax credit u/s 115JB/115JC

A taxpayer can file only one updated return for each assessment year(AY).

The form to file ITR-U can be downloaded from here

What is the Time Limit to File ITR-U?

The time limit for filing ITR-U is 24 months from the end of the relevant assessment year. You should note that for the AY 2022-23, the last date to file ITR-U is 31st March 2025. However, for the return of your file for AY 2024- 25, the last date to file ITR-U is 31st March 2027.