Filing income tax returns is a necessary annual obligation for taxpayers. On the other hand, many people occasionally omit information or make honest mistakes in their first ITR filing. In response, the Income Tax Department released a new tool called the Updated Income Tax Return (ITR-U), which allows taxpayers to amend or update previous returns. This blog covers the following topics: what ITR-U is, who can file it, what you can and cannot change, and relevant keywords like ITTR filing, ITR1, ITR2, ITR3, ITR4, ITNS 281, and how to manage your ITR login.
The Updated Income Tax Return (ITR-U) is a form introduced under Section 139(8A) of the Income Tax Act. It enables taxpayers to file an updated version of their original, belated, or revised income tax return file within a specified time frame to correct omissions or mistakes. This could include undisclosed income, wrong heads of income, or any other errors made in the original filing. The goal is to enhance voluntary compliance and avoid possible future penalties or litigation.
As extended in Budget 2025, taxpayers have 48 months from the end of the relevant assessment year to file this amended return.
Anyone who has filed their original ITR whether on time, belatedly, or as a revised return—or even those who missed filing their return entirely for a year, can file the updated return. This means it offers a second chance to taxpayers including individuals, Hindu Undivided Families (HUFs), firms, LLPs, companies, and other entities.
Eligible filers may include those who have used forms like ITR1, ITR2, ITR3, ITR4 for their original filing. Notably:
ITR1 is used by salaried individuals with simple income sources.
ITR2 is for salaried taxpayers with more complex incomes, such as capital gains or foreign assets.
ITR3 is designed for those with business or professional income.
ITR4 (Sugam) caters to individuals and firms with presumptive business income.
However, certain conditions restrict who can file ITR-U, which we discuss below.
While ITR-U allows corrections, certain restrictions ensure the updated return can't be misused:
You cannot file ITR-U to reduce your total tax liability. The updated return can only be filed if it leads to additional tax payments, including interest and penalties.
Filing an updated return to claim or increase a tax refund is not allowed.
One cannot file ITR-U if the return is a nil return or a return showing a loss.
If a search or seizure operation or a survey is underway under Income Tax laws (e.g., Sections 132, 132A, 133A), updated returns cannot be filed.
If any assessment, reassessment, or revision proceedings are pending or completed for the relevant year, ITR-U filing is disallowed.
Once an updated return has been filed for a particular assessment year, a second updated return for the same year cannot be filed.
Adjustments that reduce carried-forward losses, unabsorbed depreciation, or tax credits require filing updated returns for all affected years.
These points highlight that while taxpayers get an opportunity to correct errors, the updated return is primarily to capture additional tax liabilities and ensure voluntary compliance.
Login to the Income Tax Portal: Use your valid PAN and password to access your account. This is crucial for all ITR filing including ITR-U.
Select the Assessment Year and ITR Form: Choose the correct ITR form that you originally filed (e.g., ITR1, ITR2, ITR3, or ITR4).
Fill Part A and Part B of ITR-U:
Part A: Basic taxpayer details including PAN, Aadhaar, assessment year, and acknowledgment details of the original return.
Part B: Fill up the updated income details correctly, with reasons for updating like undeclared income or error in heads of income.
Calculate Additional Tax Liability: ITR-U requires you to pay any additional tax, interest, and a prescribed penalty.
Submit and Verify: Submit the form electronically and e-verify through Aadhaar OTP, net banking, or other accepted modes.
ITNS 281 Challan: If payment of additional tax is required, use ITNS 281 challan for direct tax deposit.
While ITR1 suits most salaried taxpayers, those with complex incomes, like capital gains, multiple house properties, foreign income, or total income exceeding ₹50 lakh, must use ITR2. The updated ITR form for AY 2025-26 has been released to help taxpayers use ITR2 online with all relevant utilities.
ITR2 is essential for salaried employees who have additional income sources, ensuring complete and accurate tax compliance especially when filing original or updated returns.
You can file only one updated return (ITR-U) per assessment year.
Filing updated returns voluntarily helps avoid penalties and litigation.
Keep your ITR login credentials safe to manage your filings smoothly.
Use ITNS 281 for any additional tax payments linked to the updated return.
Never delay filing; the ITR filing deadlines (31st July for most, 15th September for some) and ITR-U window timelines are strictly enforced.
Understand the eligibility criteria for each ITR form to avoid rejections.
If additional taxes are paid, taxpayers can use the Updated Income Tax Return (ITR-U) mechanism to correct errors or omissions in their initial ITR filings without worrying about facing penalties. ITR-U provides a second chance regardless of whether you filed your initial ITR using ITR1, ITR2, ITR3, or ITR4, or you failed to file at all. During your ITR filing process, you can stay compliant and hassle-free by understanding who is eligible to file, what updates are allowed, and how to file accurately using the income tax portal with ITNS 281 challan for tax payments.
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