ITR-U Filing Deadline on March 31: Do you want to file an updated income tax return (ITR-U) and are you still waiting? Your lackadaisical attitude may cost you dearly as the Income Tax Department (I-T) has issued a fresh warning to defaulters. In a tweet, the I-T Department said that taxpayers who want to file the updated ITR needed to hurry up as they may face an additional tax of 25 per cent and interest.

Income Tax Department on ITR-U Filing Deadline

The Income Tax Department said that if taxpayers file the updated ITR before the March 31, 2025, deadline, they need to pay 25 per cent additional tax plus interest.

But if they file it after March 31, 2025, the total penalty will be 50 per cent additional tax plus interest.

What is updated income tax return (ITR-U)?

With an aim to promote voluntary compliance, the government in the year 2022 launched the facility ITR-U, where taxpayers could file their ITR of up to 2 years from the relevant assessment year by paying additional income tax and interest.

The motive behind the move was to provide a chance to taxpayers who wanted to file it due to some unreported income or incorrect information in previously filed ITR.

Who can file updated income tax return (ITR-U)?

An individual taxpayer, a business, or an entity (except in specific cases) can file ITR-U.

They can file ITR-U even if they have filed an original, belated, or revised ITR for the relevant assessment year. 

ITR-U in Financial Year 2024-25

Pankaj Chaudhary, Minister of State for Finance, in a written reply in the Lok Sabha, said that as many as 4.64 lakh updated ITRs have been filed as on February 28, 2025, from which a tax of Rs 431.20 crore has been recovered.

In the assessment year (AY) 2023-24, as many as 29.79 lakh ITR-U had been filed.

Updated income tax return (ITR-U) filing rules from April 1, 2025

In her Budget 2025 speech, Finance Minister Nirmala Sitharaman proposed extending the current ITR-U deadline of 24 months to 48 months.

The move is to promote voluntary tax compliance.

However, if you file it after 2 years, you need to pay additional penalties

Proposed penalties for updated ITR-U filing

Up to 12 months, the penalty for ITR-U is 25 per cent additional tax plus interest. 

After 12 months and before 24 months, the penalty for ITR-U is 50 per cent additional tax plus interest. 

After 24 months and before 36 months, the penalty for ITR-U will be 60 per cent additional tax plus interest. 

After 36 months, the penalty for ITR-U will be 70 per cent additional tax plus interest.