Filing income tax returns can be stressful, and errors often slip through. The government introduced the ITR-U (Updated Income Tax Return) facility to help taxpayers correct mistakes and stay compliant.


1. What is ITR-U?

  • ITR-U is a special form introduced by the Central Board of Direct Taxes (CBDT) to allow taxpayers to update previous returns.
  • It falls under Section 139(8A) of the Income Tax Act.


2. Why Was ITR-U Introduced?

  • Introduced via the Finance Act 2022 and updated in Finance Act 2025.
  • Encourages voluntary tax compliance and reduces penalties for genuine mistakes.


3. What Can You Do with ITR-U?

  • Add omitted income that was missed earlier.
  • Correct incorrect details reported in earlier returns.
  • Rectify errors in original, revised, or belated returns.


4. Who Can File ITR-U?

  • Individuals who:
    • Missed filing their original return.
    • Failed to submit a revised or belated return.
    • Need to correct mistakes in previously filed returns.


5. Time Limit to File ITR-U

  • Can be filed within 48 months (4 years) from the end of the relevant assessment year.


6. Additional Tax Liability

  • Extra tax applies depending on how late you file:
    • Within 12 months: 25% additional tax.
    • Within 24 months: 50% additional tax.
    • Within 36–48 months: 70% additional tax.


7. Who Cannot File ITR-U?

  • Taxpayers who want to:
    • Claim or increase a refund.
    • Reduce their tax liability.
  • Cases involving search and seizure operations are also ineligible.


8. Benefits of Filing ITR-U

  • Avoid legal complications and penalties.
  • Ensure accurate tax reporting.
  • Maintain compliance without fear of prosecution.


9. How Does ITR-U Promote Transparency?

  • Provides a second chance to correct mistakes.
  • Encourages taxpayers to come forward voluntarily rather than hiding errors.


10. Final Takeaway

  • ITR-U is a game-changer for taxpayers who missed reporting income or made errors.
  • File early to avoid higher additional tax and ensure stress-free compliance.



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G GOWTHAM

26/08/2025 05:03 AM