Key Highlights
- ITR-U available under Section 285A, ITA 2025
- Can be filed up to 2 years after the end of the assessment year
- Additional tax payable: 25% of tax + interest (if filed within 1 year); 50% (if filed in 2nd year)
- Cannot be filed to claim a refund or reduce previously assessed income
- Not available if search/survey conducted or proceedings under Chapter XVI pending
- One-time opportunity per Tax Year — cannot revise an ITR-U once filed
Legal Reference
Section 285A (Updated Return — ITR-U), Income Tax Act, 2025 | Finance Act 2022 introduced ITR-U | Corresponds to Section 139(8A) of ITA 1961
1. What is ITR-U?
ITR-U (Updated Return) is a special return that allows taxpayers to declare income missed in the original/belated return — or to file a return if none was filed — for up to 2 years after the end of the assessment year. It was introduced by Finance Act 2022 to encourage voluntary disclosure and reduce litigation.
2. When Can You File ITR-U?
ITR-U can be filed to:
- Add omitted income not declared in the original/belated/revised return
- File a return for a Tax Year where no return was filed (even beyond the belated return deadline)
- Correct wrong head of income (e.g., income classified under wrong head)
- Reduce claimed losses or unabsorbed depreciation
ITR-U CANNOT be filed to: claim a refund; reduce income assessed; increase losses; or if proceedings are pending or search/survey was conducted.
3. Time Limit and Deadline
| Tax Year | Assessment Year | ITR-U Deadline |
|---|
| 2024-25 | 2025-26 | 31 March 2028 |
| 2025-26 | 2026-27 | 31 March 2029 |
| 2026-27 | 2027-28 | 31 March 2030 |
4. Additional Tax on ITR-U
| When Filed | Additional Tax on (Tax + Interest) |
|---|
| Within 1 year from end of assessment year | 25% additional tax |
| More than 1 year and up to 2 years from end of assessment year | 50% additional tax |
This additional tax is the "cost" of voluntary disclosure through ITR-U. It is over and above the regular tax and interest payable on the undisclosed income.
5. ITR-U Example
Illustrative only. Ravi forgot to declare Rs 2 lakh freelance income in his Tax Year 2025-26 ITR. He wants to file ITR-U in January 2028 (within 2 years of AY 2026-27 end i.e., 31 March 2028).
- Tax on Rs 2L at 20% = Rs 40,000
- Interest (Section 419): Rs 40,000 × 1% × ~18 months = Rs 7,200 (approx)
- Total (tax + interest) = Rs 47,200
- Since filed in 2nd year of AY: 50% additional = Rs 23,600
- Total payable = Rs 70,800 (approx)
6. Why TaxClue
ITR-U is a valuable tool to voluntarily correct past filing errors before the IT Department detects them — often at lower cost than facing a scrutiny or reassessment. TaxClue assists with ITR-U filing, additional tax computation, and timing strategy. Contact us for ITR-U and updated return services.
Disclaimer
This article is for general informational and educational purposes only. It does not constitute legal, financial, or professional tax advice. Readers are advised to consult a qualified Chartered Accountant or tax professional before making any decisions. TaxClue Consultech Pvt Ltd accepts no liability. All case studies and examples in this article are illustrative only and do not represent actual persons or transactions.
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❓ Frequently Asked Questions
What is ITR-U and when should I file it?
ITR-U (Updated Return) under Section 285A of the Income Tax Act, 2025 allows taxpayers to file a new or corrected return to add missed income, declare undisclosed income, or correct the head of income — up to 2 years from the end of the relevant assessment year. It is best filed when you realise income was omitted from the original ITR before the IT Department notices it, as it involves a known additional tax cost but avoids potentially larger penalties from scrutiny.
What is the additional tax on ITR-U?
ITR-U attracts an additional tax on the sum of regular tax plus interest. If filed within 1 year from the end of the assessment year, the additional tax is 25% of (tax + interest). If filed in the 2nd year (between 1 and 2 years from end of assessment year), the additional tax is 50% of (tax + interest). This additional tax cannot be reduced by advance tax credits or TDS already deducted — it is charged specifically on the incremental tax and interest arising from the updated return.
Can ITR-U be used to claim a refund?
No. ITR-U cannot be filed to claim a tax refund, reduce previously assessed income, or increase losses. It is specifically designed for voluntary disclosure of additional income only. If you want to claim a refund for excess TDS or advance tax, you must file the original return (or revised return within the permitted time), not ITR-U.
What is the deadline for ITR-U for Tax Year 2026-27?
For Tax Year 2026-27 (Assessment Year 2027-28), the deadline for filing ITR-U is 31 March 2030 — 2 years from the end of AY 2027-28. To get the lower 25% additional tax rate, it must be filed by 31 March 2029 (within 1 year of AY end). If filed between 1 April 2029 and 31 March 2030, the 50% rate applies. The same window applies for all earlier Tax Years proportionately.
Can I file ITR-U if search or survey was conducted?
No. ITR-U is not available if a search under Section 247 or a survey under Section 253 has been initiated, or if assessment/reassessment proceedings are pending for that Tax Year, or if information about under-reporting has been shared with the taxpayer by the Assessing Officer. Once proceedings are initiated by the department, the voluntary disclosure window of ITR-U closes and the matter is handled through the regular assessment process.
