Income Tax Department Introduces ITR-U: What You Need to Know About Updated Returns

The Income Tax department has introduced ITR-U, allowing taxpayers to file updated returns for up to four years after the relevant assessment year. This change, part of the Finance Act 2025, extends the filing period significantly. Taxpayers will face varying additional tax rates depending on when they file their returns. Over the last three years, millions of updated returns have been filed, contributing substantial revenue to the government. Read on to learn more about the implications and requirements of this new filing process.

By Narendra Chaudhary May 20, 2025, 19:38 IST

New Guidelines for Filing Updated Income Tax Returns

New Delhi: The Income Tax department has rolled out the ITR-U, enabling taxpayers to submit updated returns for a period of four years following the conclusion of the relevant assessment year (AY).

The Finance Act of 2025 has increased the timeframe for submitting these updated returns (ITR-U) from 24 months to 48 months after the relevant AY.

Taxpayers filing ITR-U within the first 12 months will incur an additional tax of 25%, while those filing within 24 months will face a 50% surcharge.

For returns submitted within 36 months and 48 months, the additional tax rates will be 60% and 70%, respectively.

Over the past three years, approximately 9 million such returns have been filed, generating an extra revenue of ₹8,500 crores.