Updated return is a new provision introduced in Budget 2022 which allows individual to file updated return Within two years from the end of the assessment year who have missed to disclose their some of income or have not filed the ITR

Example: - If a person missed on declaring some income for FY 2021-22, then he can file updated return till FY-2024-25.

The concept of updated return is different from the concept of belated return or revised return. Presently, if the income tax department finds out that some income has been missed out by the assesses, it goes through a lengthy process of adjudication instead now with this proposal the taxpayers themselves can declare the income that she/he might have missed out earlier.

For the purpose of Filing an Updated Return, Section 139(8A) is proposed to be inserted in the Income tax Act,1961 by the Finance bill, 2022.

*An updated return can be filed using form ITR-U

Who can File Updated Return?

  • Any person, whether he/she has furnished a return under section 139 sub section (1), (4), (5) for an assessment year.
  • Any person who is assessable under this Act.
  • Any person who has missed out declaring some of his/her income.
  • If there is upward revision in their income /tax liability.
The provision of Updated return will not apply, If the Updated return
  • Is a return of loss or results in refund or increase the refund due.
  • Reduces the total tax liability determined in earlier return determined basis of return furnished under section 193 sub section (1) or sub section (4) or sub section (5)
  • Is in favour of the assesses/taxpayers.
  • No Updated Return can be filed
    1. In cases where certain search and survey proceedings have already been initiated.
    2. Taxpayers against whom criminal prosecution under the income tax law have been initiated.
    3. In addition to above the CBDT can notify any person or class of person, who will not be eligible to file an updated return.

The opportunity to file Updated Return can be availed only once for a particular Assessment year. The person who files updated return must pay tax on their income along with interest and late fee.

Additional Tax:

Apart from paying tax on income disclosed in the updated return and the consequential interest and late fee, the taxpayers will also be required to pay additional tax before filing their updated return.

The 'additional tax' will be 25% of the additional tax dues, i.e., additional tax and interest, if Updated Return is filed within 12 months from the end of the relevant assessment year.
The rate of additional tax will be enhanced from 25% to 50% if the updated return filed after 12 months but before 24 months.

Example: If the total tax due is 10 Lakh rupees and the Taxpayer is Filing the return after 12 Months from the due date then he has to Pay 2.5 Lakh as Additional Tax

Pros and Cons of filing the updated return:

With discussing all the above things, we can clearly notice that the Updated return is completely in favour of generating more revenue than benefits to the taxpayers.

The option to file an updated return has been granted to a limited set of taxpayers, who wish to “voluntarily” declare additional income for tax.

The only advantage that seems to be provided to taxpayers is avoiding fines and penalties associated with the additional income disclosed in the updated return.

Difference between Revised return and updated return

Revised Return Updated return
It can be filed even if there is no additional tax liability It can be filed only when there is additional tax liability and other prescribed conditions
It can be filed only if original return (u/s 139(1)) is filed It can be filed even if original return is not filed u/s 139(1)
No penalty Penalty equivalent to 25% or 50% tax payable


“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of situation.”


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