Manesh filed his AY 23-24 ITR cleanly. Last month an AIS notification arrived: a ₹2L FD interest from his late grandfather's account that he'd inherited and forgotten about. Not declared.
Options: wait and hope, or file ITR-U now. The arithmetic strongly favours filing.
- ITR-U = Updated Return under Section 139(8A). Introduced Apr 2022.
- File up to 24 months after end of relevant AY. Additional 25% (within 12 mo) or 50% (within 24 mo) on tax + interest.
- Can declare additional income; can't reduce income or claim refund.
- Useful when AIS shows missed income, or to disclose proactively before notice.
When to use it
👉 You didn't file an ITR earlier (skipped) — now want to file
👉 You filed but missed reporting some income (AIS now shows it)
👉 Wrong head of income (capital gain shown as other sources)
👉 Want to proactively disclose foreign assets earlier missed
👉 Want to set off old losses you forgot to claim (with limits)
When you CAN'T file ITR-U
- To claim a refund (only to disclose more, not less)
- To reduce tax liability
- To increase loss / carry-forward (with some exceptions)
- When a search / requisition has been initiated against you
- When assessment / reassessment / recomputation is pending
- For the same AY — only once
What it costs — the 25% / 50% premium
Within 12 months
Earlier = cheaper
+25% of (tax + interest). The sweet spot — file fast.
12-24 months
Last window
+50% of (tax + interest). After 24 months — no ITR-U possible. Wait for notice.
Manesh's math
Missed ₹2L FD interest in AY 23-24. Files ITR-U in Aug 2025 (within 12 months of end of AY 24-25... ok actually within 12 months of end of AY 23-24 means by 31 Mar 2025; he's within 12-24 month window for that AY).
Wait for them to find it: ₹60k tax + ₹10k interest + 270A penalty of 50-200% of tax = up to ₹1.2L extra. Plus possible prosecution if intent is read as evasion. Disclosure via ITR-U is the cheap door.
How to file
PAN + password.
Pick AY, ITR form, mode "Online", filing section "Updated Return u/s 139(8A)".
From your original return + AIS data.
In the appropriate schedule.
25% or 50% — automatically based on time elapsed.
e-Verify via Aadhaar OTP / EVC / DSC. Done.
ITR-U is the IT department's olive branch — disclose voluntarily, pay an extra 25-50%, case closed. Wait for them to find out and you pay 100-200% penalty plus possible prosecution. The math favours disclosure.
Quick answers
Yes — actually one of the most common uses.
Yes — declaring more income / removing wrongly claimed loss. But ITR-U can't increase a refund or loss.
File separate ITR-U for each AY, each within its 24-month window.
Respond to notice first via Compliance Portal. If the notice itself asks you to update, do that. Confusing cases — speak to a consultant; wrong response can escalate.
No. Only one ITR-U per AY. Compute carefully before filing.
When you might want help
ITR-U with a simple FD-interest fix is DIY-able. Where engaging a CA pays off: when income is from foreign sources, when multiple AYs need fixing, when a notice is already pending, or when you're unsure whether to use ITR-U vs respond to a notice (wrong choice can be expensive).
Need to file an ITR-U?
We compute additional tax, prepare the return, and file. Faster than figuring out the portal yourself.