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2d ago

IT Department Extends ITR-U Filing Window to 4 Years with Tiered Penalties

The updated ITR-U form allows taxpayers to correct or file missed returns up to 48 months after the relevant assessment year, introducing penalties of up to 70% for delayed compliance.

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ITR Filing | Image: Sora AI

Overview

  • The Income Tax Department has officially notified the updated ITR-U form, extending the filing window to 48 months from the end of the relevant assessment year, as per the Finance Act, 2025.
  • Taxpayers filing updated returns will face a tiered penalty system: 25% additional tax within the first year, rising to 70% for filings in the fourth year.
  • ITR-U facilitates voluntary compliance by allowing corrections to previously filed returns or submission of missed returns, addressing errors such as unreported income or incorrect tax credits.
  • Section 148A notices restrict ITR-U filings after 36 months unless deemed invalid, in which case the 48-month window applies.
  • Nearly 90 lakh ITR-U filings in the past three years have generated approximately Rs 8,500 crore in additional revenue, reflecting improved compliance efforts.