Finance Minister Nirmala Sitharaman has given a big relief to the taxpayers in Budget 2025 and has extended the deadline for filing updated returns by 2 years. This will benefit those taxpayers who have missed filing the original or delayed income tax returns for some reason. Additional tax has to be paid while filing ITR-U, depending on how late the return is being filed.
New ITR Rules After Budget: Taxpayers have got a big relief in the Union Budget 2025 and the time limit for Income Tax Updated Return (ITR-U) has been increased from 2 years to 4 years. This change is beneficial for those taxpayers who forgot to file their returns or underestimated their income. The last date for filing returns for the financial year 2024-25 (Assessment Year 2025-26) is July 31, 2025. By this date, taxpayers have to declare all their income and file returns on time.
However, mistakes are common. In such cases, taxpayers have the option to revise their returns under section 139(5). If a person makes a mistake after filing the return, he can revise his return till December 31, 2025. On the other hand, if a person forgets to file the return on the original date (July 31, 2025), then he can file a belated income tax return till December 31, 2025.
What is an updated return
An updated return (Section 139(8A)) is a form that allows taxpayers to update their income tax returns. If a person has not been able to file an income tax return or belated income tax return or there is an error in the return, he can make corrections through this form. However, now this rule has been changed. But keep in mind that refund cannot be claimed in updated returns.
Now you can file 2 years old ITR as well
In Budget 2025, the deadline for filing updated returns has been extended by two more years. This means that from April 2025, taxpayers will be able to file updated returns for FY 2020-21 in addition to the previous two years. However, delays will result in additional tax payment.
When to file ITR-U
Before filing Income Tax Updated Return (ITR-U), taxpayers should keep some important things in mind. Additional tax has to be paid while filing ITR-U, depending on how late the return is being filed.
| Deadline | Additional Taxes |
| Within 12 months from the end of the relevant Assessment Year (AY) | 25% of tax + interest |
| Within 24 months from the end of the relevant AY | 50% of tax + interest |
| Within 36 months from the end of the relevant AY | 60% of tax + interest |
| Within 48 months from the end of the relevant AY | 70% of tax + interest |
How to file updated return (ITR-U)
The process of filing ITR-U is online. For this, follow the following steps:
Download ITR-U form: First download the ITR-U form from the official website of the Income Tax Department.
Log in to the e-filing portal: Visit the Income Tax e-filing portal and log in with your user ID and password.
Select Updated Return (ITR-U): After logging in, select the “Updated Return (ITR-U)” option.
Fill in the required information: Enter all the required details including additional income and tax payable.
Calculate and pay additional tax: Calculate and pay additional tax before submitting the return.
Submit and verify the return: After submitting the form, verify the return through Aadhaar OTP, net banking or digital signature (DSC).
