The updated return (ITR-U) is the income tax department’s “come clean” tool. It lets you fix an old return or file one you missed — but only in one direction: more tax, never a refund. The window is now four years, the cost rises the longer you wait, and Budget 2026 has widened who can use it. Here is where it stands in 2026.
What is ITR-U and who can file it?
ITR-U, under Section 139(8A) of the Income-tax Act, 1961 (and Section 263(6) under the Income-tax Act, 2025), lets any taxpayer — individual, HUF, firm, LLP, company, AOP or BOI — voluntarily update a return, even if no original return was filed, provided the update results in additional tax payable.
You can file ITR-U to:
- Report income you never filed a return for.
- Add income you omitted — crypto/VDA gains, rental income, interest.
- Correct a wrong head of income or a wrong tax rate.
- Reduce a carried-forward loss or unabsorbed depreciation (permitted from 1 March 2026).
- Correct TDS credits reported incorrectly.
You cannot use ITR-U to:
- Claim or increase a refund.
- Reduce the total tax liability below what you originally declared.
- File more than once for the same assessment year.
The time limit: 48 months — and what closes on 1 April 2026
The Finance Act 2025 extended the ITR-U window from 24 months to 48 months (4 years) from the end of the relevant assessment year, effective 1 April 2025. Because the window rolls forward, from 1 April 2026 you can no longer file an updated return for FY 2020-21 (AY 2021-22) — that year has now closed.
From 1 April 2026, the years that remain open for ITR-U are FY 2021-22, FY 2022-23, FY 2023-24 and FY 2024-25.
How much extra will it cost? The additional-tax slabs
ITR-U carries an “additional tax” on top of your normal tax and interest, calculated on the difference between the tax-plus-interest on the updated income and what you have already paid. It escalates the longer you wait:
| Filed within (from end of AY) | Additional tax |
|---|---|
| Up to 12 months | 25% of tax + interest |
| 12 to 24 months | 50% of tax + interest |
| 24 to 36 months | 60% of tax + interest |
| 36 to 48 months | 70% of tax + interest |
The tiered cost is a deliberate nudge: the tool gives you time, but rewards filing early. Any additional tax and interest must be paid before the ITR-U is submitted.
What Budget 2026 changed
Budget 2026 expanded ITR-U in three meaningful ways:
- Filing after a reassessment notice. You can now file ITR-U even after a notice under Section 148A, with an additional 10% premium on top of the applicable slab. Once filed, the Assessing Officer can only refer to the updated return, and no under-reporting or misreporting penalty is imposed on the income disclosed — shifting the framework from enforcement-first to compliance-first.
- Loss reduction permitted. From 1 March 2026, ITR-U can be used to reduce a carried-forward loss or unabsorbed depreciation claimed in an earlier return.
- No separate filing fee. Budget 2026 removed a distinct filing fee for ITR-U — the cost is the additional tax, not a separate charge.
ITR-U vs revised return — which to use
If the revised-return window is still open (for AY 2026-27, up to 31 March 2027), that is almost always the better route — a revised return has no additional-tax cost and can correct in either direction. ITR-U is for when the revised/belated window has closed, or when you never filed at all. Reach for ITR-U only after confirming the revised route is unavailable. See our ITR Filing AY 2026-27 due dates guide at /blog/itr-filing-ay-2026-27-due-dates.
Common mistakes to avoid
- Expecting a refund. ITR-U is one-directional — it cannot generate or increase a refund.
- Waiting too long. Each extra year pushes you into a higher slab — 25% becomes 50%, 60%, then 70%.
- Filing twice. Only one ITR-U is allowed per assessment year; get it right the first time.
- Using ITR-U when a revised return is still available. The revised return is cheaper and more flexible while its window is open.
How ITR-U fits the wider picture
ITR-U sits at the end of the correction ladder: an original return under Section 139(1), then a belated or revised return under Section 139(4)/(5), and finally the updated return under Section 139(8A) once those windows close. It is filed with the relevant ITR form (ITR-1 to ITR-7) and the additional tax paid up front, giving taxpayers a voluntary route to clean up their record before the department’s data-matching catches the gap.
Key takeaways
- ITR-U has a 48-month window; from 1 April 2026 FY 2020-21 is closed.
- Additional tax runs 25% / 50% / 60% / 70% by how late you file.
- Budget 2026 allows filing after a reassessment notice (with a 10% premium), loss reduction, and no separate fee.
- ITR-U cannot create a refund or reduce the originally declared tax.
- Prefer a revised return while its window is open.
Frequently asked questions
What is the time limit to file ITR-U? 48 months (4 years) from the end of the relevant assessment year, as extended by the Finance Act 2025.
Which years can I update from 1 April 2026? FY 2021-22, FY 2022-23, FY 2023-24 and FY 2024-25. FY 2020-21 (AY 2021-22) closed on 1 April 2026.
How much additional tax does ITR-U attract? 25% of tax and interest within 12 months, 50% within 24 months, 60% within 36 months, and 70% within 48 months from the end of the assessment year.
Can I claim a refund by filing ITR-U? No. ITR-U cannot be used to claim or increase a refund, or to reduce the tax originally declared. It is only for reporting additional income or correcting errors that increase tax.
Can I file ITR-U after receiving a reassessment notice? Yes, following Budget 2026. You can file even after a Section 148A notice, with an additional 10% premium, after which the Assessing Officer refers only to the updated return.
Is there a separate fee for filing ITR-U? No. Budget 2026 removed a separate filing fee; the cost is the additional tax on the disclosed income.
ITR-U se refund mil sakta hai? Nahi. ITR-U sirf extra income declare karne ya errors theek karne ke liye hai jisme tax badhe; isse refund claim ya badhaya nahi ja sakta.
Should I file ITR-U or a revised return? If the revised-return window is still open, use the revised return — it has no additional-tax cost and works in both directions. Use ITR-U only when the revised/belated window has closed or no return was filed.
Need to file an ITR-U correctly?
Getting the slab, the additional tax and the eligibility right — and confirming a revised return isn’t the better option — is where ITR-U mistakes happen. Regikart’s CA & CS team handles updated returns across income types. Reach us at +91 70444 94804 or [email protected], or see our income tax services at /income-tax-services.
About the author
CA & CS Team
Reviewed by Regikart at Regikart. Want to discuss this in the context of your business?
