Can You File ITR-U After Assessment or Notice? Explained
- Dipali Waghmode
- Nov 30, 2025
- 9 min read
The Updated Income Tax Return (ITR-U) allows taxpayers to voluntarily correct errors or disclose missed income after filing the original or belated return. However, confusion often arises when assessment proceedings or notices have already been issued. Budget 2025 refined these provisions under Section 139(8A) by extending the filing window to 48 months while tightening restrictions around assessments and notices. Understanding when and how ITR-U can be filed post-assessment or notice ensures compliance with the Income Tax Act and avoids unnecessary penalties.
Table of Contents
What is ITR-U and Why Was It Introduced?
ITR-U, or the “Updated Income Tax Return,” was introduced under Section 139(8A) of the Income Tax Act to allow taxpayers to voluntarily correct or update their previously filed returns. It gives individuals and businesses a chance to disclose omitted income, correct reporting errors, or file a return that was missed earlier. Introduced in Budget 2022, this mechanism promotes transparency and voluntary compliance, helping taxpayers avoid heavy penalties or prosecution. Essentially, it acts as a second chance to regularize one’s tax affairs within a specified period.
Can You File ITR-U After Assessment or Notice?
No, once an assessment, reassessment, or search proceeding has been initiated for a financial year, ITR-U cannot be filed. The updated return is intended only for voluntary corrections and not for cases under scrutiny or investigation. Similarly, if an income concealment notice or prosecution proceeding has been issued by the department, the taxpayer becomes ineligible to file ITR-U. Therefore, it’s best to update your return proactively before any notice or proceeding begins.
Updated Rules and Timeline for ITR-U Filing in 2025
As per the 2025 guidelines, taxpayers can file an updated return within 24 months from the end of the relevant assessment year. For example, for FY 2022–23 (AY 2023–24), the last date to file ITR-U would be March 31, 2026. The updated return must be filed electronically using Form ITR-U, specifying the reason for filing such as unreported income, incorrect head of income, or missed ITR submission. Once filed, ITR-U cannot be revised, so accuracy during preparation is crucial.
Tax Liability and Additional Tax Payable When Filing ITR-U
Taxpayers filing ITR-U must pay the due tax along with an additional tax as per the prescribed rates. If the updated return is filed within 12 months from the end of the relevant assessment year, an additional 25% of the tax and interest due must be paid. If filed after 12 months but before 24 months, the additional amount increases to 50%. This ensures timely compliance while discouraging delays. Importantly, any balance tax must be paid before submission, or the return will be considered invalid.
Practical Scenarios – When You Can and Cannot File ITR-U
You can file ITR-U in cases like missed income reporting, non-filing of ITR, underreported capital gains, or incorrect claim of deductions. However, it cannot be filed to reduce tax liability, claim additional losses, or request refunds. For instance, if you forgot to include income from fixed deposits or mutual fund redemptions, ITR-U can be used to declare it. But if you want to add new deductions like Section 80C or HRA to lower taxes, ITR-U cannot be used for that purpose.
How to File ITR-U Online Step-by-Step
Log in to the official Income Tax e-filing portal.
Select the “File Income Tax Return” option and choose “Updated Return (ITR-U).”
Pick the relevant assessment year and the applicable reason for filing the updated return.
Enter the additional income details under the correct heads (salary, house property, other sources, etc.).
The system auto-calculates additional tax, interest, and late fees.
Pay the total due using the “e-Pay Tax” feature and submit the return.
Verify the return via Aadhaar OTP, net banking, or DSC.
Filing platforms like TaxBuddy simplify this process by automatically identifying eligible cases for ITR-U and computing the payable tax precisely.
Can ITR-U Be Filed to Change ITR Form Type or Claim Deductions?
No, ITR-U cannot be used to switch ITR forms (for example, from ITR-1 to ITR-3) or to claim new deductions that were missed earlier. It is intended only for income correction or disclosure of previously unreported income. Taxpayers looking to modify deductions or restructure form type should have done so through a revised return under Section 139(5), not ITR-U. Hence, it’s important to differentiate between revision and updating of returns.
Penalties, Ineligibility, and Common Mistakes to Avoid
Filing an updated income tax return (ITR-U) requires precision, as even minor errors can lead to penalties or disqualification from availing the benefit of updating your return. The Income Tax Department has set strict rules for filing ITR-U, and taxpayers must meet all conditions to ensure their updated return is accepted. Incorrect filing can result in penalties, interest payments, or in some cases, outright rejection of the return.
One of the most common mistakes taxpayers make is submitting ITR-U without paying the full tax and applicable interest before filing. The law clearly requires that all outstanding tax liabilities, including additional tax under Section 140B, be settled in advance. Failure to do so makes the filing invalid. Another frequent error involves selecting the wrong assessment year while updating the return, which can misalign the data with existing records and result in mismatches with the Annual Information Statement (AIS) or Form 26AS. Misreporting income—such as declaring income under the wrong head or failing to include income reflected in AIS—is another error that often triggers notices or leads to disallowance.
It is also important to distinguish between an updated return (ITR-U) and a revised return. A revised return, filed under Section 139(5), can only be used to correct errors or omissions in an already filed ITR within the specified deadline for that assessment year. In contrast, ITR-U, filed under Section 139(8A), allows taxpayers to correct or disclose income beyond the normal filing window but comes with an additional tax cost. However, it cannot be used to reduce tax liability, claim new deductions, or seek a refund. Any attempt to misuse this provision, whether intentionally or by oversight, may result in rejection and further scrutiny by the department.
Role of TaxBuddy in Simplifying ITR-U Filing
To avoid these issues, taxpayers should verify all details before submission. Cross-checking data between AIS, Form 26AS, and the original ITR helps ensure consistency. Ensuring accurate tax computation, verifying payment challans, and confirming the correct assessment year are crucial steps. Maintaining documentation for all income sources and taxes paid helps in case the department seeks clarification later.
This is where professional assistance plays a significant role. TaxBuddy simplifies ITR-U filing through its AI-driven and expert-assisted processes that identify inconsistencies before submission. The platform automatically compares data from AIS, Form 26AS, and the taxpayer’s previous ITRs to detect discrepancies in income, TDS, or tax payments. It then computes the exact additional tax liability and ensures the correct figures are reported. TaxBuddy’s experts review each case individually to verify eligibility for ITR-U filing and help prepare accurate, compliant returns.
The service also reduces the risk of penalties by checking whether all taxes and interest have been paid before submission. It guides users step by step through the updated return filing process, ensuring that all mandatory conditions under Section 139(8A) and Section 140B are met. With real-time validation and expert review, taxpayers can file confidently, knowing their ITR-U aligns with current compliance standards.
By using TaxBuddy’s platform, taxpayers save time, eliminate guesswork, and minimise the risk of rejection or notices. The integration of automation with professional review makes it easier for individuals to remain compliant even when updating older returns. As tax regulations continue to evolve, having a reliable platform like TaxBuddy ensures that every update is accurate, compliant, and stress-free.
Conclusion
ITR-U has empowered taxpayers to correct unintentional errors and disclose missed income voluntarily, thus avoiding penalties or litigation. It strengthens transparency in tax reporting and encourages compliance by offering a structured correction mechanism. Timely filing and proper documentation are key to avoiding extra costs or scrutiny. Platforms like TaxBuddy make this process effortless by guiding users step-by-step through eligibility checks, tax computation, and submission.
For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. What is the time limit for filing ITR-U? An updated return (ITR-U) can be filed within 24 months from the end of the relevant assessment year. For instance, for the financial year 2022–23 (assessment year 2023–24), the ITR-U can be filed up to March 31, 2026. This extended time frame allows taxpayers to correct omissions or disclose unreported income even after the regular or belated return filing window has closed.
Q2. Can I use ITR-U to claim a refund? No, ITR-U cannot be filed to claim additional refunds or reduce an existing tax liability. The form is meant strictly for situations where the taxpayer wishes to declare additional income or correct an underreported amount. The intention is to allow taxpayers to voluntarily rectify their return and pay the due taxes with applicable interest and additional charges, ensuring full compliance.
Q3. Is it mandatory to pay additional tax while filing ITR-U? Yes. When filing ITR-U, an additional tax must be paid along with the regular tax and interest. The additional amount depends on how late the updated return is filed — 25% of the total tax and interest if filed within 12 months, or 50% if filed after 12 months but within 24 months from the end of the relevant assessment year.
Q4. Can I file ITR-U after receiving an income tax notice? No. Once a taxpayer has received an income tax notice for scrutiny, reassessment, search, survey, or prosecution for the relevant assessment year, the option to file ITR-U is not available. The provision is meant for voluntary compliance and cannot be used as a remedy after an official investigation has begun.
Q5. How is ITR-U different from a revised return? A revised return (filed under Section 139(5)) is used to correct minor errors or omissions in an already filed return and can be submitted before the assessment is completed. ITR-U, on the other hand, allows taxpayers to disclose unreported income or missed filings even after the due date and revision window have passed. It provides a final opportunity to become compliant without facing severe penalties.
Q6. Can businesses file ITR-U? Yes, both individuals and businesses can file ITR-U, provided they are not under investigation, audit, or scrutiny for the same financial year. Companies, partnerships, and proprietorships can all use the updated return option to report additional income or correct errors made in earlier filings.
Q7. What reasons can be selected while filing ITR-U? While filing ITR-U, taxpayers must choose one or more specific reasons such as omission of income, incorrect income classification, underreporting, or failure to file the original return. The form requires you to clearly indicate the reason and pay the associated taxes before submission to ensure validity.
Q8. Can I file ITR-U for more than one year at a time? Yes, taxpayers can file ITR-U for multiple years, but each assessment year requires a separate form and calculation. Every ITR-U must adhere to the 24-month deadline from the end of the relevant assessment year. For example, ITR-U for FY 2021–22 and FY 2022–23 can be filed separately, provided both are within the permissible time limit.
Q9. Do I need to submit supporting documents with ITR-U? Uploading supporting documents is not mandatory at the time of filing. However, taxpayers should maintain relevant records like income proofs, bank statements, tax computations, and challans for additional tax payment. These documents may be requested later by the Income Tax Department for verification.
Q10. What happens if I file ITR-U without paying full tax? An ITR-U filed without paying the complete tax, interest, and additional amount will be treated as defective and invalid. The Income Tax Department will not process such returns, and the taxpayer will be required to correct the discrepancy by paying the dues before refiling. Non-payment can also attract penalties or further scrutiny.
Q11. Can ITR-U be filed through mobile apps or third-party platforms? Yes, ITR-U can be filed using authorized third-party tax platforms such as TaxBuddy. These platforms calculate the exact amount of tax and additional liability payable, auto-fill the updated return form, and ensure accurate filing. TaxBuddy also provides expert-assisted plans that review entries for compliance and prevent rejection or mismatch issues.
Q12. What are the benefits of filing ITR-U voluntarily? Filing an updated return voluntarily offers several benefits — it helps avoid penalties, scrutiny notices, and legal proceedings for underreporting income. It also improves financial transparency and builds a reliable tax record for future assessments or credit evaluations. Using a professional platform like TaxBuddy further simplifies the process by ensuring correct tax computation and seamless submission.
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