What Is the Penalty for Updated Return (ITR-U) in India?
Complete Guide for FY 2023–24 and FY 2024–25
Missed filing your Income Tax Return?
Forgot to report some income?
Or realized you need to revise your return after the due date has passed?
The Government of India introduced the Updated Return (ITR-U) facility to give taxpayers a second chance—but it comes with strict conditions and additional penalties.
Let’s break down exactly what is the penalty for filing an updated return, when you can use ITR-U, and how much extra tax you’ll need to pay.
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🧾 What Is an Updated Return (ITR-U)?
Introduced via Finance Act 2022, ITR-U (under Section 139(8A)) allows taxpayers to:
• File or correct an ITR for up to 2 years after the end of the relevant assessment year
• Even if the original deadline or belated/revised return window has passed
✅ It can be used for:
• Missed income reporting
• Non-filing of ITR
• Incorrect or underreported income
But filing comes at a cost—let’s see how much.
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💰 What Is the Penalty for Filing an Updated Return?
The penalty isn’t a fixed fee—it’s a percentage of additional tax + interest that becomes payable due to updated income.
| When You File ITR-U | Additional Tax Payable |
| Within 12 months from end of Assessment Year | 25% of additional tax + interest |
| Between 12–24 months | 50% of additional tax + interest |
🔁 Example:
• Say you missed reporting ₹2 lakh of business income
for FY 2022–23 (AY 2023–24)
• Tax payable = ₹40,000
• Interest = ₹2,000
• If filed by 31 March 2025, additional penalty = 25% of ₹42,000 = ₹10,500
• 👉 Total payable: ₹52,500
If you delay beyond March 2025, penalty = 50% → You pay ₹63,000 instead!
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🛑 Situations Where ITR-U Cannot Be Filed
You cannot use updated return if:
• You’re trying to claim or increase a refund
• You want to reduce your tax liability
• You’re filing a nil return
• The return involves losses to be carried forward
• The Income Tax Department has initiated proceedings under sections like 132 (search) or 147 (reassessment)
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🗓️ ITR-U Filing Window (As of Now)
Financial Year Assessment Year ITR-U Filing Allowed Till
FY 2021–22 AY 2022–23 31 March 2025
FY 2022–23 AY 2023–24 31 March 2026
FY 2023–24 AY 2024–25 31 March 2027
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✅ How to File ITR-U?
1. Visit the Income Tax Portal
2. Choose 'ITR-U' form along with applicable ITR (1–7)
3. Mention the reason for updating: unreported income, incorrect return, etc.
4. Calculate tax + interest + additional penalty (25% or 50%)
5. Submit the return and acknowledgment
💡 You can file ITR-U even if you haven’t filed any return earlier for that year.
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Final Words
The penalty for updated return filing is significant—25% to 50% extra tax, depending on how late you are.
But it’s still a powerful option to come clean and avoid notices, scrutiny, or prosecution later.
If you’ve missed reporting income or skipped filing altogether—don’t wait. File ITR-U with us before the cost gets heavier.
To book your service, click here: https://callmyca.com/business-tax-filing
