IT Department Brings Big Update, ITR-U Can Now Be Filed For 4 Years

New Delhi: The Income Tax Department has announced a major change for taxpayers by updating the rules for filing revised or updated income tax returns, known as ITR-U. Now, people can file their updated returns for up to 4 years (or 48 months) from the end of the relevant assessment year (AY).

This change was made through the Finance Act, 2025. Earlier, taxpayers had only 2 years (24 months) to file an updated return. With this extended time, taxpayers now get more flexibility to correct or update their earlier filed tax returns if they missed something or made a mistake.

However, filing an ITR-U comes with additional tax payments.

If you file the updated return within 12 months after the end of the assessment year, you need to pay an extra 25 per cent on the due tax and interest.

If you file between 12 and 24 months, the extra tax goes up to 50 per cent.

Filing between 24 and 36 months means paying 60 per cent extra.

If you file between 36 and 48 months, you will have to pay 70 per cent extra on your tax and interest.

The goal of this move is to encourage better tax compliance and help the government collect more revenue. Over the past three years, nearly 90 lakh updated returns have been filed, which brought in around Rs 8,500 crore in extra income for the government.

This change is expected to benefit many who earlier missed out on the chance to correct their returns and help them avoid legal troubles.

(With PTI Inputs)