ITR-U vs Revised Return: Which Is Better for Correcting Mistakes?
- Rashmita Choudhary
- Oct 31
- 10 min read
For correcting mistakes in your Indian Income Tax Return (ITR), both ITR-U (Updated Return) and Revised Return serve as valid mechanisms. Each caters to different circumstances depending on when the error is discovered and the type of correction required. A Revised Return is suitable for timely corrections within the assessment year, while ITR-U is meant for older or missed returns discovered much later. Understanding the differences between these two ensures compliance, prevents penalties, and helps taxpayers choose the right course for rectifying income, deduction, or reporting errors efficiently.
Table of Contents
Understanding the Purpose of Correcting an ITR
Correcting an Income Tax Return (ITR) is an essential part of maintaining compliance with the Income Tax Department. Mistakes can happen while filing—such as entering incorrect income figures, omitting deductions, or failing to report certain investments or bank accounts. These errors may lead to mismatched data in the Annual Information Statement (AIS), TDS discrepancies, or even notices from the department. Correcting such issues on time helps avoid penalties, interest, and unnecessary scrutiny. The government allows two main mechanisms for making corrections — filing a Revised Return under Section 139(5) or an Updated Return (ITR-U) under Section 139(8A), depending on the timing and nature of the error.
What Is a Revised Return Under Section 139(5)?
A Revised Return allows taxpayers to correct mistakes or omissions made in the original ITR. It can be filed under Section 139(5) of the Income Tax Act, 1961, if an error is discovered after submitting the original return. The deadline for filing a revised return is either before the end of the relevant assessment year or before the completion of the assessment, whichever occurs earlier.
The revised return replaces the original one, meaning the latest submission becomes the final return considered by the department. This facility can be used multiple times within the allowed window as long as the assessment is not completed. Common corrections include wrong income reporting, claiming unreported deductions, rectifying bank details, or correcting any clerical mistakes. Filing a Revised Return does not attract additional penalties, though interest under Sections 234A, 234B, or 234C may apply if taxes are unpaid.
What Is ITR-U (Updated Return) Under Section 139(8A)?
The ITR-U or Updated Return was introduced by the Finance Act 2022 to provide taxpayers with an extended opportunity to correct past mistakes. It can be filed within three years from the end of the relevant assessment year when the window for a Revised Return has already closed. This provision aims to promote voluntary compliance by allowing taxpayers to report missed income, deductions, or other details without waiting for scrutiny or notices.
An ITR-U can be filed to declare additional income or rectify under-reporting, but it cannot be used to claim additional refunds or report losses. It applies to returns already filed—original, belated, or revised—and helps avoid prosecution by self-correcting errors. However, it involves paying an additional tax of 25% or 50% on the extra tax liability, depending on how late it is filed. Only one ITR-U can be filed per assessment year.
ITR-U vs Revised Return: Key Differences Explained
While both serve the purpose of correcting errors, they differ significantly in terms of timing, scope, and cost.
Feature | Revised Return | ITR-U (Updated Return) |
Section | 139(5) | 139(8A) |
Filing window | Before end of assessment year or before assessment completion | Within 3 years from end of assessment year |
Number of times allowed | Multiple times until assessment is completed | Only once per year |
Additional tax or penalty | None (only applicable interest) | 25%–50% additional tax on extra liability |
Purpose | Correct mistakes within the same year | Correct errors after all deadlines have passed |
Refund eligibility | Allowed if overpaid | Not allowed; no additional refund claims |
Complexity | Simple and straightforward | Requires separate ITR-U form and computation |
The Revised Return is a simpler, no-penalty route if the error is detected early. The ITR-U is a powerful but costlier tool for taxpayers who missed reporting or underreported income in older years.
When to File a Revised Return for Error Correction
A Revised Return should be filed immediately after identifying any mistake in the originally filed ITR, as long as the time limit allows. It is ideal for fixing reporting errors such as wrong income entries, missed deductions, or incorrect bank account details. For instance, if an individual discovers an omitted interest income from a savings account within the same assessment year, a revised return can be filed before the due date or completion of assessment.
Taxpayers should ensure that the revised return accurately reflects all income and deductions, as this version supersedes previous filings. Filing early also minimizes interest and avoids complications in refund processing.
When to File an ITR-U for Old or Missed Income Corrections
An ITR-U is appropriate when the deadline for filing a Revised Return has passed or when significant income or errors were missed in earlier years. It is beneficial for taxpayers who wish to correct old returns without waiting for an official notice. Common scenarios include unreported business income, TDS mismatches, rental income omissions, or unclaimed capital gains.
The ITR-U can be filed within three years from the end of the relevant assessment year. For example, for FY 2021-22 (AY 2022-23), an ITR-U can be filed up to March 31, 2025. However, it cannot be used to claim new deductions or refunds; it is purely meant to declare additional income and pay the corresponding tax along with the applicable additional levy.
Penalties and Additional Tax Implications Under ITR-U
Filing an ITR-U involves paying an additional tax as a percentage of the extra tax liability. If filed within one year from the end of the relevant assessment year, a 25% additional tax on the extra liability is payable. If filed between one and two years, the rate rises to 50%. Beyond three years, the opportunity to file ITR-U lapses entirely.
This additional tax is over and above normal tax, interest, and fee payable under other provisions. Though costlier, it provides a clean compliance route and shields taxpayers from future scrutiny or penalties related to unreported income. Paying voluntarily under ITR-U often prevents harsher consequences under reassessment or prosecution.
Common Mistakes Taxpayers Can Correct Using ITR-U and Revised Return
Taxpayers can use these mechanisms to fix a wide range of issues, including:
Omission of income from interest, rent, or side business
Missed TDS entries or mismatched credit details
Non-disclosure of capital gains or foreign income
Clerical errors such as incorrect personal details or bank account numbers
Failure to include exempt income that must be reported for disclosure purposes
While Revised Returns allow rectification for the current year, ITR-U provides an option for older mistakes, ensuring long-term compliance and peace of mind.
Latest Updates and CBDT Guidelines on ITR-U and Revised Returns
As of 2025, the Central Board of Direct Taxes (CBDT) continues to support ITR-U filings for assessment years up to 2023–24. Taxpayers can file updated returns through the income tax portal using the ITR-U form. CBDT notifications have also simplified the reporting and payment process by integrating real-time tax calculation tools into the filing system.
Currently, taxpayers can update returns for AY 2021–22, AY 2022–23, and AY 2023–24. The department has not announced any major procedural changes but continues to encourage voluntary compliance through this extended mechanism. The revised return process remains unchanged under Section 139(5), allowing timely corrections before assessment closure.
Which Is Better — ITR-U or Revised Return for 2025?
The better choice depends on when the mistake is discovered. For errors identified within the current assessment year, the Revised Return under Section 139(5) is the more efficient and cost-free solution. It allows multiple corrections, no extra tax, and quicker processing.
ITR-U, on the other hand, is best for taxpayers who missed the revision deadline or discovered unreported income after a long gap. Although it attracts additional tax, it provides legal protection and ensures compliance. For FY 2024–25, choosing between these two depends on your filing stage, time left before assessment completion, and the financial impact of corrections.
How TaxBuddy Simplifies Filing and Corrections
TaxBuddy simplifies the entire process of identifying and correcting errors in income tax returns. Through its AI-driven tax filing system, it automatically detects discrepancies in your ITR, flags missed deductions, and recommends whether a Revised Return or ITR-U is suitable. TaxBuddy’s expert-assisted plans ensure that all updates are compliant with the latest CBDT guidelines, eliminating the risk of notices or penalties.
Its intuitive mobile app and online platform make filing, revising, and updating returns effortless for both salaried and business taxpayers. The system also maintains a secure record of your previous filings, helping you compare data and make accurate corrections without confusion.
Conclusion
Choosing between ITR-U and Revised Return ultimately comes down to timing and the extent of the error. Filing a Revised Return early is ideal for small mistakes within the same assessment year, while ITR-U offers a safety net for older corrections beyond standard deadlines. Both ensure compliance and peace of mind when handled properly.
For a hassle-free correction process, professional guidance and a reliable filing tool make all the difference. The TaxBuddy platform provides real-time assistance and intelligent recommendations to help you select the right approach for your situation. 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. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers flexibility through both self-filing and expert-assisted ITR filing plans. The self-filing option allows taxpayers to file returns independently with the help of an intuitive, step-by-step interface that simplifies the process. For those dealing with complex income sources, capital gains, or foreign income, the expert-assisted plan ensures a professional tax expert reviews, prepares, and files the return on your behalf. This dual approach helps taxpayers choose based on their comfort level and filing complexity while ensuring compliance with the latest Income Tax rules.
Q2. Which is the best site to file ITR?
Among the various platforms available, TaxBuddy stands out as one of India’s most reliable and user-friendly platforms for income tax filing. It integrates AI-driven analysis with real-time validation to eliminate common filing errors. The platform is designed for salaried individuals, freelancers, NRIs, and business owners, offering both assisted and self-filing options. Its seamless user experience, post-filing support, and refund tracking make it one of the best alternatives to the government’s e-filing portal for hassle-free tax filing.
Q3. Where to file an income tax return?
Income Tax Returns (ITRs) can be filed online through two main channels — the official Income Tax e-filing portal (www.incometax.gov.in) or through authorized platforms like TaxBuddy. While the government portal requires manual entry and verification, TaxBuddy simplifies this by auto-importing Form 16 and TDS details, performing AI-based checks, and providing professional assistance when needed. This ensures accuracy, saves time, and reduces the chances of filing errors.
Q4. What are the main differences between ITR-U and Revised Return?
The Revised Return, filed under Section 139(5), is meant for correcting mistakes in an already filed ITR before the end of the assessment year or before assessment completion. It does not attract additional penalties, and multiple revisions are allowed within the permitted period. In contrast, ITR-U, filed under Section 139(8A), can be used when the regular correction window has closed. It allows rectification within three years from the end of the assessment year but comes with an additional tax of 25–50% on the extra tax liability. While the Revised Return is a quick fix for recent errors, ITR-U offers an extended timeline for older omissions but at a higher cost.
Q5. Can I file ITR-U if I missed reporting income two years ago?
Yes. The ITR-U provides an opportunity to rectify missed or unreported income for up to three years from the end of the relevant assessment year. For example, if income was missed in FY 2021–22 (AY 2022–23), taxpayers can file an ITR-U until March 31, 2025. This helps individuals and businesses voluntarily declare undisclosed income, pay the due tax along with the prescribed additional tax, and avoid potential penalties or prosecution for non-disclosure.
Q6. What is the deadline to file a Revised Return for FY 2024–25?
The deadline to file a Revised Return for FY 2024–25 (AY 2025–26) is March 31, 2026, unless the assessment is completed earlier. Taxpayers should aim to file corrections as soon as errors are discovered to ensure smooth processing and quicker refunds. Once the assessment is completed or the time limit expires, only an ITR-U can be filed to make further corrections. Filing before the deadline avoids penalties and ensures timely compliance with the Income Tax Department.
Q7. How much additional tax is payable when filing ITR-U?
When filing ITR-U, the taxpayer must pay additional tax on top of the regular tax and interest. If the updated return is filed within one year from the end of the relevant assessment year, the additional tax is 25% of the total additional liability. If it is filed between one and two years, the rate increases to 50%. For instance, if an extra ₹20,000 in tax is due, an additional ₹5,000–₹10,000 will be payable depending on the filing timeline. This cost acts as an incentive to correct old errors promptly.
Q8. Can I revise my ITR multiple times before assessment?
Yes. Taxpayers can revise their ITR multiple times before the assessment is completed or before the end of the relevant assessment year, whichever is earlier. Each revision replaces the previous return, and the latest one is treated as the valid return by the Income Tax Department. This flexibility allows taxpayers to ensure that all income sources, deductions, and details are accurately reported before final assessment. However, once the assessment is completed, no further revisions can be made, and ITR-U becomes the only option.
Q9. Is ITR-U applicable for under-reported or unreported income only?
Yes. The ITR-U is specifically designed for declaring additional income that was previously under-reported or not reported at all. It cannot be used to claim extra deductions, report losses, or seek higher refunds. The goal is to promote voluntary compliance by enabling taxpayers to disclose missed income without waiting for tax department action. Filing ITR-U in such cases not only corrects records but also protects taxpayers from potential scrutiny or penalties later.
Q10. Can TaxBuddy help identify whether to file a Revised Return or ITR-U?
Yes. TaxBuddy’s AI-powered system and team of tax professionals can analyze your case to determine whether a Revised Return or ITR-U is the correct option. The platform reviews your filing date, assessment status, and the type of correction needed before suggesting the right approach. This ensures that you stay compliant, avoid paying unnecessary penalties, and select the most cost-effective correction method.
Q11. Does filing ITR-U cancel my previous return?
No, filing an ITR-U does not cancel your previously filed return. Instead, it supplements the earlier return by adding or modifying income details and paying the corresponding tax dues. The original return remains valid, but the ITR-U updates the records with the corrected income. The combined filings present the taxpayer’s final compliance position for that assessment year. It’s a rectification process, not a replacement of the earlier filing.
Q12. What documents are needed while filing an ITR-U through TaxBuddy?
When filing an ITR-U, the following documents are required for accuracy and compliance:
Acknowledgement number of the previously filed return
Form 26AS and AIS for income and TDS verification
Bank account statements showing unreported income
Proof of additional income (salary slips, rent receipts, capital gains statements)
Calculation of additional tax payable
Challan details for tax payment (Form 280)
TaxBuddy simplifies this process by auto-fetching relevant data from the Income Tax portal and preparing the ITR-U in compliance with CBDT guidelines. This ensures error-free filing and smooth approval from the department.
