Updated return (ITR-U) explained

ITR-U lets you file or correct a return for an extended period after the assessment year, to report income you missed or didn't file at all. It's designed to encourage voluntary compliance — coming forward before the department catches the omission.

The key limitation: an updated return can only be used to declare additional income and pay more tax. You can't use ITR-U to claim a refund, increase a loss, or reduce your tax — it's strictly for paying what you should have.

Filing ITR-U comes at a cost: you pay additional tax over and above the normal tax and interest, and the additional percentage increases the longer you wait. Filing sooner within the window is cheaper than later.

ITR-U can't be used in certain situations — for example, where it would result in a refund or reduced liability, or where proceedings are already underway in some cases. Check eligibility before relying on it.

ITR-U is a safety valve for genuine omissions, not a substitute for filing correctly and on time. If you realise you missed income from an earlier year, it's far better to regularise via ITR-U — with the extra tax — than to leave it and risk a notice.