An Updated Return (ITR-U) is a special type of income tax return that allows individuals and businesses in India to voluntarily correct or update their previously filed income tax return — or even file one if they missed the original deadline.
Introduced under Section 139(8A) of the Income Tax Act, the ITR-U can be filed within 24 months from the end of the relevant assessment year. This gives taxpayers an extended opportunity to disclose omitted income, correct mistakes, or bring their tax filings in line with actual financial records. It’s especially useful for small business owners, freelancers, or startups who may have made unintentional errors or missed income details in their initial filing.
Filing an ITR-U helps maintain compliance with tax regulations and avoid future scrutiny or penalties. However, it's important to note that an additional tax (up to 50% of the due tax) may apply depending on when the updated return is filed. Also, ITR-U cannot be used to report losses, claim or increase refunds, or reduce tax liability.
In practical terms, the ITR-U is a safety net that promotes transparency and gives taxpayers a chance to stay compliant without fear of legal repercussions, as long as they come forward voluntarily.
For professional help with income tax filing and compliance, you can explore FinTax24’s income tax solutions.