Missed Your ITR? New 4-Year Window Opens for Taxpayers

Missed Your ITR? New 4-Year Window Opens for Taxpayers!

by

You can now file missed Income Tax Returns (ITRs) for up to four years after the relevant assessment year ends! The Union Budget 2025 has extended the deadline for filing an Updated Income Tax Return (ITR-U) from two years to four years. This is a huge relief for taxpayers who need to correct past filings.

What’s New with ITR-U?

The biggest change is the extended window: you now have 48 months (four years) from the end of the relevant assessment year to file an ITR-U. This means:

  • For Financial Year (FY) 2020-21 (Assessment Year (AY) 2021-22), the last date to file ITR-U is March 31, 2026.
  • For FY 2021-22 (AY 2022-23), you have until March 31, 2027.
  • For FY 2022-23 (AY 2023-24), the deadline is March 31, 2028.
  • For FY 2023-24 (AY 2024-25), you can file until March 31, 2029.

Why File an ITR-U?

ITR-U is your chance to fix errors or omissions in your previously filed returns, or to file a return if you missed the original and belated deadlines. It’s especially useful if you need to report a higher tax liability due to:

  • Income that wasn’t reported or was reported incorrectly.
  • Choosing the wrong income heads.
  • Paying tax at the wrong rate.

However, keep in mind that you cannot use ITR-U to reduce your tax liability, claim a refund, or increase a loss.

The Cost of Catching Up

While ITR-U offers a valuable second chance, it does come with an additional tax. The longer you wait, the higher the penalty:

  • Within 12 months from the end of the relevant assessment year: 25% of the additional tax (tax plus interest).
  • Between 12 and 24 months: 50% of the additional tax.
  • Between 24 and 36 months: 60% of the additional tax.
  • Between 36 and 48 months: 70% of the additional tax.

How to File Your ITR-U

It’s a straightforward process:

  1. Log in to the Income Tax e-filing portal.
  2. Go to e-File > Income Tax Returns > File Income Tax Return.
  3. Select the Assessment Year you want to update.
  4. Choose “Section 139(8A) – Updated Return” as the filing type.
  5. Select the correct ITR form (e.g., ITR-1, ITR-2).
  6. Provide the reason for updating your income.
  7. Proceed with online filing or attach your JSON file if filing offline.
  8. Validate, confirm, and submit your return.
  9. Don’t forget to e-verify your ITR-U within 30 days!

This new provision encourages voluntary compliance and aims to reduce tax-related disputes, giving you more time to get your filings right.

Leave a Comment