The Updated Return (ITR-U)

The belated and revised return windows close on fixed dates. Income that comes to light after that, such as an interest account never reported, a capital gain left out or a receipt booked in the wrong year, used to have no voluntary route back into the tax computation. The only way in was a reassessment, with penalty attached. The updated return fills that gap. It lets a person reopen a closed year, on his own initiative, to pay more tax. It cannot be used to pay less. And it has a price that rises with every year of delay.

Which Act governs which year

• Assessment year 2026-27 (financial year 2025-26) and every earlier year fall under the Income-tax Act, 1961. The updated return is filed under section 139(8A), the tax is computed under section 140B, and the form is ITR-U under rule 12AC of the Income-tax Rules, 1962. That follows from section 536(2) of the Income-tax Act, 2025, which keeps the 1961 Act in force for tax years beginning before 1 April 2026. The portal’s transition FAQ confirms that an updated return for AY 2025-26 or earlier “may still” be filed “subject to the time limits prescribed under Section 139(8A) of the old Act”, and that AY 2026-27 updated returns also fall under section 139(8A).
• Tax year 2026-27 (1 April 2026 to 31 March 2027) and later fall under the 2025 Act. The updated return is filed under section 263(6), the additional tax is in section 267, and rule 165 of the Income-tax Rules, 2026 prescribes the form, ITR-UN. No updated return for tax year 2026-27 can be filed yet. Its belated and revised windows are still open, and the earliest additional-tax band starts only once they close.

The 48-month window

The Finance Act, 2025 (Act 7 of 2025) substituted “forty-eight” for “twenty-four” in section 139(8A), with effect from 1 April 2025. An updated return may now be furnished “at any time within forty-eight months from the end of the relevant assessment year”. Section 263(6)(a) of the 2025 Act uses “forty-eight months from the end of the financial year succeeding the relevant tax year”, which is the same point measured differently.

On 19 October 2026 the position under the 1961 Act is as follows.

Assessment year	48 months end on	Band applying on 19 October 2026	Band ends
2021-22	31 March 2026	Closed	—
2022-23	31 March 2027	36–48 months: 70 per cent	31 March 2027
2023-24	31 March 2028	24–36 months: 60 per cent	31 March 2027
2024-25	31 March 2029	12–24 months: 50 per cent	31 March 2027
2025-26	31 March 2030	Up to 12 months: 25 per cent	31 March 2027
2026-27	31 March 2031	Not yet open (revision possible to 31 March 2027)	—

Every band changes on 1 April 2027. For each open year, the additional tax rises by one step on that date, and AY 2022-23 closes altogether.

The additional tax

Section 140B(3) fixes the additional income-tax as a percentage of the “aggregate of tax and interest payable”:

• 25 per cent, if the updated return is filed after the time for a belated or revised return has expired and within 12 months from the end of the relevant assessment year;
• 50 per cent, after 12 months but within 24 months;
• 60 per cent, after 24 months but within 36 months;
• 70 per cent, after 36 months but within 48 months.

The 60 and 70 per cent bands were added with the 48-month extension. The Explanation to section 140B(3) includes surcharge and cess in “tax”. Section 267(5)(i) and (6) of the 2025 Act are in the same terms.

A higher rate where a reassessment notice has issued. The Finance Act, 2026 inserted a proviso into section 139(8A), with effect from 1 March 2026, allowing an updated return “in pursuance of a notice under section 148 within such period as specified in the said notice”. Once that route is used, the assessee is “precluded from filing return in pursuance of the said notice in any other manner”. New section 140B(3A) adds “a further sum of ten per cent” of the aggregate of tax and interest. The revised Form ITR-U, notified by Notification No. 52/2026 dated 30 March 2026, therefore shows two scales: 25, 50, 60 or 70 per cent, or, for a return filed in response to a section 148 notice, 35, 60, 70 or 80 per cent. Under new section 270A(11A), income on which that additional tax is paid “shall not form the basis of imposition of penalty” under section 270A. Section 263(6)(b)(ii) and section 267(5)(ii) of the 2025 Act carry the same rule by reference to a notice under section 280.

What the aggregate includes. Where no earlier return was filed, section 140B(1) requires the tax, together with interest and fee for late filing and for default in advance tax (sections 234A, 234B, 234C and 234F), to be paid with the additional tax before filing. Where an earlier return exists, section 140B(2) works on the tax payable after the earlier return, increased by any refund already issued on it. Interest is computed afresh but reduced by the interest already paid with the earlier return. Section 140B(4) computes section 234B interest on the assessed tax as declared in the updated return. The return must carry proof of payment. A return without it is defective under clause (ca) of the Explanation to section 139(9).

Who cannot file

The provisos to section 139(8A) shut the route in these cases.

By the nature of the return. An updated return cannot be:

• a return of loss;
• a return that decreases the tax liability determined on the earlier return; or
• a return that results in a refund, or increases the refund due on the earlier return.

There is one exception. A person who filed a loss return within the time allowed under section 139(1) may file an updated return that is a return of income. Since the Finance Act, 2026, he may also file one that “has the effect of reducing the loss”. If an updated return reduces a loss, unabsorbed depreciation or MAT/AMT credit carried forward to later years, an updated return must be filed for each of those later years too.

Because of departmental action. No updated return may be filed:

• where a search has been initiated, books or assets have been requisitioned, or a survey (other than under section 133A(2A)) has been conducted in the person’s case, or a notice has been issued that seized material belongs or relates to him. The bar covers the year of the search, survey or requisition and every earlier year;
• where an updated return has already been filed for that year;
• where any proceeding for assessment, reassessment, recomputation or revision is pending or completed for that year, except for the new section 148 notice route;
• where the Assessing Officer has information under the SAFEMA, Benami, PMLA or Black Money Acts, or information under a tax treaty, and has communicated it before the updated return is filed;
• where prosecution under Chapter XXII has been initiated for that year;
• where a show-cause notice under section 148A has been issued after 36 months from the end of the relevant year, unless an order under section 148A(3) finds it not a fit case for a notice under section 148; or
• where the person belongs to a class notified by the Board.

The 2025 Act lists the same exclusions in section 263(6)© and (d).

How the Tribunal has applied the conditions

A pending assessment. In Abhinandan Shanthinath Saligrama v. DCIT (ITAT Bangalore, 30 March 2026), a salaried employee’s AY 2023-24 return was selected for scrutiny. The return contained exemptions and deductions the Tribunal described as false. Six days after the section 143(2) notice, he filed what he called an updated return, withdrawing the claims and paying the balance tax under section 140B. The Tribunal held the updated return invalid, because the third proviso to section 139(8A) bars an updated return while an assessment is pending. It confirmed the additions. It did direct that the tax already paid under section 140B be credited.

An updated return filed as a fallback. In Devang Yogesh Metha v. ITO (ITAT Mumbai, 29 December 2025), the CPC had treated a belated return for AY 2021-22 as invalid under section 139(9). The assessee filed an updated return, with 25 per cent additional tax, as an alternative, and at the same time challenged the invalidity. Once the appellate authority held the original return valid, the Tribunal directed that the updated return be “ignored and treated as non-est”, because acting on both would assess the same income twice.

The first year of the scheme. In Swaminathan Sukumar v. ITO (ITAT Chennai, 14 October 2025), an updated return for AY 2020-21 was filed on 31 October 2022. That was more than 12 months after the assessment year ended, but section 139(8A) came into force only on 1 April 2022, and the ITR-3 utility was enabled only on 9 July 2022. The CIT(A) had applied the 50 per cent rate on the plain text. The Tribunal restricted it to 25 per cent, treating the form’s unavailability as a “procedural impossibility”. It also held section 234A interest to run only up to the date the tax was paid. The decision turns on the scheme’s first year and departs from the statutory measure, which runs from the end of the assessment year. It is a single Tribunal decision, and no higher authority on the point has been found.

What to have ready

• The earlier return and its intimation under section 143(1), if any, from the portal. The updated return quotes its acknowledgement number and date, and its figures are the base for the computation.
• The AIS and TIS for the year, from the portal’s AIS service. Most updated returns follow information that appears there. See Reconciling AIS, TIS and Form 26AS.
• Confirmation that no excluded event has occurred: no search, survey, pending assessment, section 148A show-cause after 36 months, or prosecution. The portal’s e-proceedings tab and the assessee’s own correspondence are the sources.
• The full computation of the updated income in the regular ITR form that applies, with tax, interest under sections 234A to 234C, any section 234F fee, and the additional tax.
• The challan for the section 140B payment, made before filing. The form records the BSR code, date of deposit, challan serial number and amount. See Advance Tax and Self-Assessment Tax for the e-Pay Tax steps.
• A section 148 notice and its DIN, if the updated return is filed in response to one.

The form: ITR-U

Form ITR-U, as substituted by Notification No. 52/2026 (G.S.R. 233(E), 30 March 2026), is filed together with the regular ITR for the year. It has two parts.

Part A (General information – 139(8A)). This part records:

• whether a return was previously filed, and if so under section 139(1) or otherwise, with its acknowledgement number and date (A5–A7);
• a declaration that the person is eligible under the first four provisos (A8);
• the ITR form being used to update income (A9);
• the reason for updating (A10). The options include “Return previously not filed”, “Income not reported correctly”, “Wrong heads of income chosen”, “Reduction of carried forward loss”, “Wrong rate of tax” and “Return in response to notice u/s 148”, the last with the notice’s DIN and date;
• the 12-month band in which the return is filed (A11);
• whether the return reduces a loss, unabsorbed depreciation or tax credit carried forward, and for which later years (A12).

Part B-ATI (Computation of total updated income and tax payable). This part computes:

• the additional income by head, and the income as per the last valid return (item 1);
• tax payable on the updated return, and on the last valid return (items 3 and 5);
• the refund claimed and refund issued on the last valid return, including section 244A interest (item 6);
• the section 234F fee (item 7);
• the aggregate liability on the additional income (item 9);
• the additional income-tax at the applicable percentage of item 9 less item 7 (item 10);
• net amount payable, tax paid under section 140B, and tax due (items 11 to 13);
• the challan details (item 14).

Because the base excludes the fee, the additional tax is not charged on the section 234F fee. Item 14B is for advance tax and self-assessment tax not claimed in the earlier return, and the form notes that credit for such taxes “is not to be allowed again” under section 140B(2).

For tax year 2026-27 onwards, rule 165 of the Income-tax Rules, 2026 prescribes Form ITR-UN.

Portal steps

The portal treats ITR-U as one more filing type of the year’s return, filed electronically with the applicable ITR. Its user manuals do not set out a separate screen sequence, so this guide does not either. The steps that matter are:

1. Pay the tax, interest, fee and additional tax by challan through e-Pay Tax, choosing the Income-tax Act, 1961 for any AY 2026-27 or earlier year.
2. Prepare the applicable ITR with the updated figures, and complete Part A and Part B-ATI of ITR-U.
3. Upload and verify the return.

If the CPC finds the return defective, its notice is answered through Pending actions and then e-Proceedings. The portal’s FAQ says to select section 139(8A), not section 139(9), when responding to a defect notice against an updated return.

Signing and verification

Section 139(8A) requires the updated return to be “verified in such manner” as may be prescribed. ITR-U carries its own verification by the person “in my capacity as” the relevant representative. It is verified like any return: by digital signature (compulsory for companies and for audit cases), by electronic verification code, or by sending ITR-V to the CPC, within 30 days of upload. Rule 165(2) of the 2026 Rules repeats these modes for ITR-UN. See E-Verifying a Return.

What can and cannot be changed afterwards

Only one updated return may be filed for a year. A mistake in it cannot be corrected by a second ITR-U, and section 139(5) does not allow an updated return to be revised. The routes left are rectification under section 154 against the intimation that processes it, and appeal. An updated return does not reopen anything the law has closed. Interest and the late fee for the original default are still paid. Losses not determined in a timely return stay barred by section 80, other than in the loss-return exception above.

Summary

1. Identify the year and the Act. AY 2026-27 and earlier: section 139(8A) and section 140B, Form ITR-U. Tax year 2026-27 onwards: section 263(6) and section 267, Form ITR-UN.
2. Check that the year is within 48 months and that no exclusion applies, particularly a pending assessment, a search or survey, or a late section 148A show-cause.
3. Confirm the return increases tax. It may not show a loss, reduce tax or create or increase a refund, except in the loss-return case.
4. Compute tax, interest and fee on the updated income, then the additional tax at 25, 50, 60 or 70 per cent of tax plus interest (35, 60, 70 or 80 per cent if filed in response to a section 148 notice).
5. Pay the whole amount by challan before filing.
6. File the applicable ITR with ITR-U Parts A and B-ATI, and verify within 30 days.
7. File updated returns for each later year whose carried-forward loss or credit is reduced.

The next guide covers reconciling the AIS, TIS and Form 26AS, where most of the information that prompts an updated return first appears.