ITR filing 2025: How the Updated Return facility gives taxpayers a second chance to get it right

An updated return can be filed only after the due date for original, revised or belated returns has passed. The purpose of filing an updated return is to declare additional income and pay the resulting additional tax. Notably, an updated return cannot be revised once filed.

There are specific limitations on filing updated returns. For example, you can't file an updated return to claim a loss or increase your refund amount. Additionally, the updated return shouldn't lead to a decrease in your tax liability.

If a taxpayer misses the December 31 deadline, they can still file an updated return (ITR-U) under Section 139(8A) of the Income-tax Act within four years from the end of the relevant assessment year.

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Additional tax on updated returns

Filing an updated return has its own requirements, including paying a percentage of the additional tax liability, which depends on the filing timeframe.

Specifically, if you file an updated return within 12 months of the assessment year end, you'll need to pay 25 percent of the additional tax. This percentage increases to 50 percent if filed within 24 months, 60 percent within 36 months, and 70 percent within 48 months of the assessment year end.

The additional tax levy of 25-70 percent of the tax and interest due substantially hikes the total tax liability for taxpayers.

Caveats in extending updated returns to 48 months

Filing updated returns has some other restrictions. If the income tax department initiates reassessment proceedings, you can't file an updated return within 36 months. However, if the proceedings are later dropped, you can still file an updated return within the 48-month limit.