ITR U Form: What Is It and How to File Updated Returns in 2025?

Filing income tax returns (ITR) is a crucial responsibility for every taxpayer. However, mistakes, omissions, or missed deadlines can lead to complications. To address such situations, the Income Tax Department introduced ITR U form (Updated Return), allowing taxpayers to rectify errors and comply with tax regulations without legal consequences.

In this blog, we will cover everything you need to know about ITR U Return, including eligibility, filing process, deadlines, penalties, and its benefits.

What is ITR U ?

ITR U (Updated Income Tax Return) was introduced under Section 139(8A) of the Income Tax Act, 1961 through the Finance Act 2022. It allows taxpayers to correct omissions, errors, or missed reporting in previously filed ITRs or file a return if they failed to do so earlier. This provision helps individuals and businesses avoid penalties and legal actions by voluntarily updating their tax returns.

Who Can File ITR U?

You can file an Updated Return (ITR U) under the following circumstances:

If you missed filing the original ITR before the due date.
If there was incorrect income reporting or omissions in the original ITR.
If you claimed wrong deductions or exemptions.
If there were incorrect tax payments.
If you missed reporting additional income.

Who Cannot File ITR U?

An Updated Return (ITR U) cannot be filed in the following cases:

If the updated return results in a refund or a reduction in tax liability.
If an assessment or reassessment is already initiated for that financial year.
If you have pending prosecution cases under tax laws.
If your income details remain unchanged compared to the original return.
If the updated return is being filed beyond the time limit.

Time Limit for Filing ITR U

A taxpayer can file ITR U within 24 months (2 years) from the end of the relevant assessment year. For instance:

For FY 2021-22 (AY 2022-23), the updated return can be filed until March 31, 2025.
For FY 2022-23 (AY 2023-24), the updated return can be filed until March 31, 2026.
For FY 2023-24 (AY 2024-25), the updated return can be filed until March 31, 2027.

Penalty and Additional Tax on ITR U

While ITR U provides an opportunity to correct mistakes, it comes with additional tax liabilities. Taxpayers must pay an additional tax depending on when they file:

Within 12 months from the end of the relevant assessment year – Additional tax of 25% on due tax and interest.
Between 12 to 24 months from the end of the relevant assessment year – Additional tax of 50% on due tax and interest.

How to File ITR U?

Filing ITR U involves a step-by-step process:

Step 1: Compute Tax Liability

Calculate the tax payable, including additional taxes as per the prescribed rates.

Step 2: Pay the Additional Tax

Use Challan ITNS 280 to pay the tax due under the category “Self-Assessment Tax”.

Step 3: Prepare Updated Return

Log in to the Income Tax e-filing portal (https://www.incometax.gov.in/iec/foportal/).
Download the relevant ITR form (ITR-1 to ITR-7) along with ITR-U.
Fill in the correct income details and reasons for updating.
Attach proof of tax payments (challan details).

Step 4: File ITR U Online

Submit the ITR U form via the e-filing portal.
Verify the return using Aadhaar OTP, Digital Signature (DSC), or Electronic Verification Code (EVC).

Step 5: Keep Acknowledgment Safe

After successful filing, download and save the ITR-V Acknowledgment for future reference.

Benefits of Filing ITR U

Avoids Legal Consequences – Helps in preventing penalties, scrutiny, and prosecution for tax evasion.
Reduces Future Tax Liabilities – Helps in rectifying past errors, avoiding interest on unpaid tax.
Provides Compliance Flexibility – Gives taxpayers an opportunity to correct omissions and comply with tax laws.
Enhances Creditworthiness – A clean tax record improves financial credibility for loans and investments.

Final Thoughts

ITR U is a valuable facility for taxpayers who need to rectify past mistakes or missed filings. However, calculating taxes, penalties, and navigating the filing process can be complex. Seeking professional assistance ensures compliance, accurate filings, and minimum tax liability.