ITR-U: A Second Chance to Rectify Your Tax Return Mistakes

For the Income Tax filing of financial year 2024-25 (assessment year 2025-26), the due date for individuals not requiring audit was September 16, 2025. Although the majority of eligible taxpayers had filed their ITRs before the prescribed deadline, some eligible taxpayers still missed it for several reasons, be it a portal error in the last hours or a negligent approach to compliance.

So, taxpayers who missed the original deadline can still file their belated ITR for FY 2024-25 (AY 2025-26) by December 31, 2025.

There are some taxpayers who, despite filing their returns on time, face a troubling situation in which they made a mistake or omitted information. In these circumstances, the ITR-U (Updated Return) provides taxpayers with a second chance to comply. It is developed for Taxpayers who have made mistakes or missed information in their original, belated, or revised income tax return.

How are the additional tax and interest computed on the corrections reported in ITR-U?

Taxpayers must pay the additional tax arising from the corrections, along with the applicable interest and penalties, when filing an ITR-U.

The additional tax is computed as the difference between the tax liability on the updated income and the tax already paid.

Interest and Penalties :

• Interest under Sections 234A, 234B, and 234C may be applicable to the additional tax due.
•  Penalty is levied based on the timing of the filing.

•  Within 12months: 25% (additional tax and interest )
•  12 to 24 months: 50% (additional tax and interest).
•  24 to 36 months: 60% ( additional tax and interest )

Conclusion

The ITR-U framework offers taxpayers a valuable second chance to correct omissions or errors in their income tax returns. Timely filing of the updated return ensures compliance while minimizing interest and penalties on the additional tax due. Taxpayers should carefully review their returns and act promptly to take advantage of this facility before the deadline.