CBDT introduces revised Form ITR-U allowing taxpayers to update returns within 48 months with structured format for disclosing additional income and calculating extra tax liability

The Hon'ble Central Board of Direct Taxes (CBDT) vide Notification No. 49/2025 dated May 19, 2025, has amended the Income-tax Rules, 1962 by substituting a new Form ITR-U for filing updated income tax returns under Section 139(8A) of the Income-tax Act, 1961. The amendment comes into force on the date of its publication in the Official Gazette.

The CBDT, in exercise of the powers conferred by sub-section (8A) of section 139 read with section 295 of the Income-tax Act, 1961, has issued the Income-tax (Nineteenth Amendment) Rules, 2025, through Notification No. 49/2025 dated May 19, 2025.

The amendment substitutes the existing Form ITR-U with a new Form ITR-U (ITR for updated return) in Appendix-II of the Income-tax Rules, 1962. This form is specifically designed for persons who wish to update their income within forty-eight months from the end of the relevant assessment year, as permitted under Section 139(8A) of the Income-tax Act.

The new Form ITR-U introduces several key features and requirements:

1. It requires basic information such as PAN, Name, Aadhaar Number, Assessment Year, and confirmation of whether a return was previously filed for the assessment year.

2. The form asks for the acknowledgment number or receipt number and date of filing the original return, if applicable.

3. Taxpayers must confirm their eligibility for filing an updated return as per the conditions laid out in first, second, third, and fourth provisos to section 139(8A).

4. The form requires selection of the appropriate ITR form (ITR 1-7) for updating income.

5. Taxpayers need to specify reasons for updating their income, with options including: return previously not filed, income not reported correctly, wrong heads of income chosen, reduction of carried forward loss, reduction of unabsorbed depreciation, reduction of tax credit u/s 115JB/115JC, wrong rate of tax, or others.

   
   

6. The form specifies different time periods for filing the updated return: up to 12 months from the end of the relevant assessment year, between 12 to 24 months, between 24 to 36 months, or between 36 to 48 months.

   
   

7. It also includes detailed sections for computation of total updated income and tax payable, including provisions for specifying additional income under different heads, calculating the aggregate liability, and determining additional income-tax liability on updated income.

8. The form includes sections for recording tax payments made under Section 140B, advance tax, self-assessment tax, and regular assessment tax.

To be noted

The Central Board of Direct Taxes, in exercise of its powers under sub-section (8A) of section 139 read with section 295 of the Income-tax Act, 1961, has determined that the existing Form ITR-U needed to be replaced with a new format. The Board has therefore issued the Income-tax (Nineteenth Amendment) Rules, 2025, which substitutes the old Form ITR-U with a new version.

The new Form ITR-U provides a more comprehensive framework for taxpayers to update their income within forty-eight months from the end of the relevant assessment year. It includes detailed sections for specifying the nature of updates, calculating additional tax liability, and recording tax payments.

The key features of the new form include:

1. A structured format for providing general information and confirming eligibility for filing an updated return.

2. Clear categories for specifying the reasons for updating income, allowing tax authorities to better understand the nature of updates being made.

3. A detailed computation section for calculating the total updated income and the resulting tax liability.

   
   

4. Specific provisions for calculating additional income-tax liability on updated income at the rate of 25%, 50%, 60%, or 70% of the aggregate liability on additional income, depending on the time period within which the updated return is filed.

   
   

5. Sections for recording tax payments made under Section 140B specifically for the updated return.

6. A verification section requiring the taxpayer to solemnly declare that the information provided is correct and complete.

These changes are aimed at improving the accuracy and transparency of updated returns, ensuring proper tax collection on additional income disclosed, and facilitating compliance with the provisions of Section 139(8A) of the Income-tax Act, 1961.

The amended rules came into force on May 19, 2025, the date of their publication in the Official Gazette.

Relevant Sections

"Section 139(8A) of Income-tax Act, 1961" "Section 295 of Income-tax Act, 1961" "Rule 12AC of Income-tax Rules, 1962" "Section 140B of Income-tax Act, 1961"