Big Update! New ITR-U Form 2025 Allows 4-Year Old Returns

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The new ITR-U form notified via the latest CBDT notification reflects significant changes that allow taxpayers to file updated returns for up to four assessment years from the end of the relevant assessment year. Here are the key highlights based on the document you shared:

Click here to get new ITR U form





🔄 Major Changes in the New ITR-U Form:

  1. Extended Time Limit for Filing ITR-U:
    • Earlier: ITR-U could be filed for up to 2 assessment years after the end of the relevant assessment year.
    • Now: ITR-U can be filed for up to 4 assessment years, expanding the window for taxpayers to correct past omissions or misreporting.
  2. Applicable Sections:
    • Updated return filing remains governed by Section 139(8A) of the Income-tax Act.
  3. Additional Tax Liability:
    • Filing ITR-U still requires payment of additional tax:
      • 25% of the additional tax and interest if updated within 12 months.
      • 50% if filed between 12 and 24 months.
      • The extended 3rd and 4th year filings likely attract higher additional tax (could go up to 60%-70%), depending on final rules or circulars to be issued.
  4. Structure of the New Form:
    • The format captures:
      • Reason for updating return
      • Assessment year being updated
      • Particulars of income previously reported and now updated
      • Computation of additional tax liability
      • Verification and declaration
  5. Limitations:
    • You still cannot file ITR-U to:
      • Claim a refund.
      • Decrease tax liability.
      • File if a search/survey/reassessment notice is already issued.
      • File if the updated return results in a loss or reduced income.

✅ Benefits of the New ITR-U Form:

  • Provides a wider compliance window for honest taxpayers to voluntarily disclose income.
  • Reduces litigation and penalties by encouraging voluntary tax correction.
  • Encourages better tax compliance history for businesses and individuals.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, M.com) having 15 years of experience. Educator and Digital Creator

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