How to File Updated ITR (ITR-UN) Under New Income Tax Rules 2026

The Updated Return, now called ITR-UN under the new Income Tax Act 2025, allows any taxpayer to correct errors or declare additional income for past assessment years by paying additional tax at 25% to 70%. Filing ITR-UN on the e-filing portal at incometax.gov.in takes 15 to 30 minutes if you have prepared the income computation and paid the additional tax in advance via Challan 280. This guide covers the complete filing process, eligibility criteria, additional tax calculations, documents required, and common mistakes for the 2026 filing cycle, applicable to AY 2020-21 onwards.

What is an Updated Return (ITR-UN)?

ITR-UN (Updated Return) is the prescribed income tax return form under the new Income Tax Act 2025 that allows taxpayers to voluntarily file or update their income tax return after the original, belated, or revised return deadline has passed. It replaces the ITR-U form that was introduced under Section 139(8A) of the Income Tax Act 1961 in Finance Act 2022. The Updated Return enables taxpayers to declare additional income and pay the applicable additional tax without facing prosecution or the more severe 200% penalty for under-reporting income.

The new Income Tax Act 2025 retains the core mechanism of updated returns while expanding the filing windows. Under the previous framework, taxpayers had 24 months from the end of the relevant assessment year to file an updated return. The new Act extends this to a maximum of 60 months with graduated additional tax rates: 25% for the first 12 months, 50% for 12 to 24 months, 60% for 24 to 48 months, and 70% for 48 to 60 months. This extended window gives taxpayers more time to voluntarily rectify omissions, though at progressively higher additional tax costs. The Income Tax Department views ITR-UN filings as positive voluntary compliance, which weighs favourably if any future scrutiny occurs.

The form is available on the e-filing portal at incometax.gov.in for all assessment years from AY 2020-21 onwards. Filing requires prior payment of the computed additional tax through Challan 280, and the process is entirely online. Each taxpayer can file only one updated return per assessment year. Once filed and e-verified, the ITR-UN becomes the final return for that assessment year and cannot be revised or updated again.

ITR-UN vs ITR-U: What Changed Under the New Income Tax Act 2025

The transition from the Income Tax Act 1961 to the new Income Tax Act 2025 brought several changes to the updated return provision. While the fundamental concept remains the same, taxpayers should understand the differences to file correctly.

The 48-month and 60-month windows represent the most significant enhancement. Under the old regime, a taxpayer who missed income for AY 2022-23 had until 31 March 2025 (24 months from end of AY) to file ITR-U. Under the new regime, the same taxpayer has until 31 March 2027 (48 months) at 60% additional tax, or 31 March 2028 (60 months) at 70% additional tax. This gives substantially more time for taxpayers to come forward, particularly for complex matters where income computation takes time, such as property transactions, foreign asset declarations, or business restructuring income.

Who Can File ITR-UN? Eligibility Criteria

The Updated Return is available to all categories of taxpayers, not just individuals. Any person who has tax liability for a past assessment year can use ITR-UN to declare additional income and pay the applicable additional tax. The eligibility is broad, but the form cannot be used for specific purposes that reduce tax liability.

Eligible Taxpayers

Scenarios Where ITR-UN is Commonly Filed

In practice, the Updated Return serves five primary scenarios. First, taxpayers who completely missed filing their original return and the belated return window has also closed. Second, salaried individuals who discover unreported income after receiving the AIS (Annual Information Statement) mismatch notice. Third, taxpayers who forgot to report capital gains from mutual fund redemptions, share sales, or property transactions. Fourth, persons who incorrectly claimed deductions (under Section 80C, 80D, etc.) and need to rectify. Fifth, businesses that under-reported revenue or claimed excess expenses and want to voluntarily correct the return before the department initiates proceedings.

When ITR-UN Cannot Be Filed: Restrictions

The updated return comes with clear restrictions under the new Income Tax Act 2025. Filing ITR-UN is not permitted in the following situations:

1. Search initiated under Section 132: If the Income Tax Department has conducted a search (raid) at your premises or at any person connected to you, ITR-UN cannot be filed for any assessment year covered by the search proceedings
2. Survey conducted under Section 133A: If a survey has been conducted at your business premises, updated returns cannot be filed for the assessment years under survey
3. Requisition of books under Section 132A: If the department has requisitioned books of account or documents, the updated return is barred
4. Updated return results in a loss: ITR-UN must always report higher taxable income. It cannot be filed to declare a loss under any head or to increase an existing loss
5. Updated return reduces tax liability: The return must result in additional tax payment. It cannot be used to reduce the tax already paid or assessed
6. Return claims or increases a refund: ITR-UN cannot be filed to claim a refund or to increase a refund already claimed in the original return
7. Assessment or reassessment is pending: If proceedings under Section 147 or 148 have been completed for that assessment year, ITR-UN may not be accepted
8. Prosecution proceedings initiated: If prosecution for tax evasion has been initiated under Chapter XXII for the relevant assessment year

Additional Tax Rates and Calculation for ITR-UN

The additional tax on an updated return is the most critical computation. The rate depends on when you file relative to the end of the relevant assessment year. The additional tax is computed on the differential tax liability, not on the additional income. Understanding this calculation prevents overpayment or underpayment, both of which create complications during filing.

Additional Tax Rate Structure

Step-by-Step Additional Tax Calculation

Follow this computation method:

1. Compute revised total income: Original declared income + Additional income being disclosed through ITR-UN
2. Calculate tax on revised total income: Apply the applicable tax slab rates (old or new regime, whichever was selected in the original return)
3. Deduct tax already paid: Subtract TDS, advance tax, and self-assessment tax already deposited for that assessment year
4. Determine differential tax: Tax on revised income minus tax already paid = base differential amount
5. Add interest under Section 234A/B/C: Calculate interest for late filing (234A), short advance tax (234B), and deferred advance tax (234C) on the additional income
6. Compute aggregate tax and interest: Differential tax + applicable interest = aggregate amount
7. Apply additional tax percentage: Aggregate amount x applicable additional tax rate (25%/50%/60%/70%)
8. Add health and education cess: 4% cess on the total (base tax + additional tax + interest)
9. Total payable: Base differential tax + interest + additional tax + cess = amount to pay via Challan 280

Practical Calculation Example

Consider a salaried individual who declared total income of ₹8,00,000 in the original return for AY 2025-26 (new tax regime). Later, they discover unreported bank interest of ₹1,50,000 and short-term capital gains of ₹2,00,000 from mutual fund sales. The revised total income is ₹11,50,000.

If the same taxpayer delays filing to the 24-month window, the additional tax at 50% would be ₹23,240 instead of ₹11,620, increasing the total payable to ₹72,044. Filing within 12 months saves ₹11,620 in this example. For higher income disclosures, the savings are proportionally larger. A ₹10 lakh additional income disclosed within 12 months vs 24 months can result in savings of ₹50,000 to ₹1,00,000 depending on the tax slab.

Documents Required for Filing ITR-UN

Prepare these documents before starting the filing process on the e-filing portal. Having all documents ready reduces filing time to 15 to 20 minutes and prevents errors that could trigger rejection or further notices from the department.

Mandatory Documents

1. PAN card: Your Permanent Account Number linked to the e-filing portal account. The PAN determines the applicable ITR form (ITR-1/2/3/4) used as the base for the updated return
2. Aadhaar card: Linked with PAN for Aadhaar OTP-based e-verification. If Aadhaar is not linked, use DSC or bank account-based EVC
3. Original ITR acknowledgement: The acknowledgement number and filing date of the original return (if one was filed) for the assessment year being updated
4. Form 26AS: Download from incometax.gov.in showing all TDS credits, advance tax payments, and self-assessment tax for the relevant assessment year
5. Annual Information Statement (AIS): Download from the compliance portal within incometax.gov.in, showing all reported financial transactions including interest, dividends, share transactions, and property registrations
6. Challan 280 receipt: Payment proof of additional tax deposited before filing, with BSR code, date of deposit, and challan serial number

Supporting Documents (Based on Income Type)

Step-by-Step: How to File ITR-UN Online

The complete ITR-UN filing process involves 7 steps. The process takes 15 to 30 minutes if you have computed the additional tax and paid it via Challan 280 in advance. The portal at incometax.gov.in handles all updated return filings online. There is no offline utility or paper-based option for ITR-UN.

Step 1: Calculate Additional Income and Tax Liability

Before logging into the portal, complete the tax computation offline. Identify every item of income that was not reported or was incorrectly reported in the original return. Common missed items include bank interest from savings and fixed deposits (check Form 26AS and AIS), capital gains from mutual fund redemptions or share sales (check broker capital gains statements), rental income from let-out property, freelance or consulting payments received during the year, and income from other sources such as gifts, LIC maturity proceeds, or interest on income tax refunds.

Add the identified income to the total income declared in the original return. Apply the applicable tax slab rates for the assessment year using the same tax regime (old or new) that was selected in the original return. You cannot switch tax regimes through the updated return. Calculate the differential tax, add interest under Sections 234A, 234B, and 234C, and apply the additional tax percentage (25%/50%/60%/70%) based on your filing window. Use the IncorpX income tax calculator to verify your computation before proceeding to payment.

Step 2: Pay Additional Tax via Challan 280

Log in to the e-filing portal at incometax.gov.in and navigate to e-Pay Tax from the left menu. Select Challan ITNS 280 (Income Tax). Choose the correct assessment year for which you are filing ITR-UN. Under the type of payment, select "Tax on Updated Return (300)" as the minor head. Enter the computed amount covering base tax, interest, additional tax, and cess. Choose your payment method: net banking (SBI, HDFC, ICICI, and other authorised banks), debit card, UPI (Google Pay, PhonePe, Paytm), or NEFT/RTGS for amounts above ₹1 lakh.

After successful payment, the portal generates a challan receipt with three critical details: the BSR code (7-digit code of the receiving bank branch), date of deposit, and challan serial number (5-digit serial). Note all three values, as they are mandatory fields in the ITR-UN form. The challan takes 2 to 3 working days to reflect in the OLTAS (Online Tax Accounting System) records. You can check the challan status at e-Pay Tax > Payment History on the portal. Do not proceed with ITR-UN filing until the challan status shows "Booked" in the system.

Step 3: Log In and Select Updated Return Filing

Once the challan is confirmed, log in to incometax.gov.in with your PAN and password. Navigate to e-File > Income Tax Returns > File Income Tax Return. Select the relevant assessment year from the dropdown. When asked for the filing type, select "Updated Return u/s 139(8A)" (the portal displays the new Act reference for ITR-UN). Select the applicable ITR form: ITR-1 for salaried individuals with income up to ₹50 lakh, ITR-2 for individuals with capital gains or foreign assets, ITR-3 for business/professional income, or ITR-4 for presumptive taxation. The portal auto-selects the form based on your original filing.

Step 4: Select the Reason for Filing Updated Return

The portal requires you to select one of the following reasons for filing the updated return:

• Return previously not filed: Select this if you did not file any return (original, belated, or revised) for the assessment year
• Income not reported correctly: Select if you missed income from any source or under-reported amounts
• Wrong heads of income chosen: Select if you classified income under the wrong head (e.g., reporting capital gains as other income)
• Reduction of carried forward loss: Select if you incorrectly carried forward losses to future years
• Reduction of unabsorbed depreciation: Select for businesses that over-claimed depreciation
• Wrong rate of tax: Select if the wrong tax slab or regime was applied
• Any other reason: A catch-all for situations not covered above, such as correcting deduction claims

The selected reason is recorded in the ITR-UN and is visible to the Assessing Officer. Select the reason that most accurately describes your situation. If multiple reasons apply, select the primary one. Selecting "Any other reason" for simple income omissions may trigger additional scrutiny, so choose the specific reason when available.

Step 5: Fill in Updated Income Details

The portal pre-fills data from your original return (if one was filed). Review each section and update the income figures. For the income head being corrected, enter the revised amount that includes both the original income and the additional income. For all other heads, retain the original figures unless they also need correction. The portal calculates the differential tax automatically based on the original return data and the revised figures you enter.

Key sections to update include: Income from Salary (if missed employer income), Income from House Property (if rental income was not declared), Capital Gains (for share sales, mutual fund redemptions, property sales), Profits and Gains of Business (for under-reported business revenue), and Income from Other Sources (for bank interest, dividends, gifts, and other receipts). After entering all revised figures, the portal computes the additional tax payable including the surcharge and cess.

Step 6: Enter Challan Payment Details

In the tax payments section, navigate to the challan entry fields. Enter the BSR code (7-digit bank branch code from the challan receipt), date of deposit (the date the payment was made, not the date it was booked), and challan serial number (5-digit serial from the receipt). The portal validates these details against the OLTAS database. If the validation fails, check that the challan has been booked (typically 2 to 3 working days after payment) and verify the BSR code from the challan CIN (Challan Identification Number) printed on the receipt.

Step 7: Preview, Submit, and E-Verify

After filling all sections, the portal generates a preview of the complete ITR-UN form. Review every field carefully, paying attention to the total income, tax computation, additional tax calculation, and challan details. Check that the additional tax percentage matches your filing window (25%/50%/60%/70%). Submit the return and proceed to e-verification. E-verification options include: Aadhaar OTP (most popular; requires PAN-Aadhaar link), Net banking (log in to your bank and verify the return), Digital Signature Certificate (Class 2 or 3 DSC registered on the portal), or Bank account EVC (electronic verification code sent to registered mobile).

E-verification must be completed within 30 days of filing. If not verified in time, the return is treated as not filed, and the additional tax paid is available for adjustment but may require a manual request to the Assessing Officer. After successful e-verification, download the ITR-UN acknowledgement (ITR-V) and save it for at least 8 years. The acknowledgement contains the confirmation number, filing date, and all declared income details.

ITR-UN Filing Deadlines by Assessment Year

The deadline for filing ITR-UN depends on the assessment year and the additional tax window you choose. The table below shows the applicable deadlines and rates for commonly filed assessment years as of March 2026.

Updated Return vs Revised Return vs Belated Return

Taxpayers often confuse the updated return (ITR-UN) with the revised return and belated return. Each serves a different purpose with different deadlines, costs, and restrictions. Choosing the correct option saves both time and additional tax.

The decision tree is straightforward: if the deadline for revised/belated return has not passed (31 December of the assessment year), use the revised return to avoid additional tax. If that window is closed and you need to declare additional income, use ITR-UN. If you need to correct an error that reduces your tax liability (such as claiming a missed deduction), the updated return is not an option, and you must approach the Assessing Officer under Section 154 for rectification.

Common Income Types Reported Through ITR-UN

Based on analysis of updated return filings processed by the department, certain income types account for the majority of ITR-UN submissions. If you are checking whether your situation qualifies for an updated return, review this list.

Bank and Fixed Deposit Interest

The most commonly missed income category. Savings account interest above ₹10,000 (₹50,000 for senior citizens under Section 80TTA/80TTB) is taxable. Fixed deposit interest is fully taxable regardless of amount. Many taxpayers overlook interest from multiple bank accounts, recurring deposits, or cooperative society deposits. The AIS now reports all interest credited across banks, making non-disclosure easily detectable. If your total unreported interest exceeds ₹10,000, filing ITR-UN within the 12-month window (25% additional tax) is significantly cheaper than the penalty for under-reporting if the department identifies it first.

Capital Gains from Mutual Funds and Shares

Equity mutual fund redemptions, systematic withdrawal plans (SWPs), and share sales generate capital gains that many taxpayers forget to report. Short-term capital gains on equity (held under 12 months) are taxed at 15%, while long-term gains above ₹1 lakh (held over 12 months) are taxed at 10% without indexation. Debt mutual fund gains are taxed at slab rates regardless of the holding period. Check your consolidated capital gains statement from CAMS, KFintech, or your broker to identify unreported transactions.

Rental Income from Property

Property owners who receive rent but did not declare it in their ITR face significant risk. Under Section 24, rental income is taxable under "Income from House Property" after allowing a standard deduction of 30% and interest on home loan. The AIS now captures rental income data from tenant TDS filings (Form 26QC) and property registration records. Unreported rental income above ₹2.5 lakh per year is a high-priority target for automated compliance notices.

Freelance and Consulting Income

Freelancers and consultants who earn income from multiple clients sometimes miss reporting payments from clients who did not deduct TDS. While TDS-deducted income appears in Form 26AS, direct payments not subject to TDS may go unreported. ITR-UN allows disclosure of such income under "Profits and Gains of Business or Profession" using the actual receipts and expense records.

Common Mistakes While Filing ITR-UN and How to Avoid Them

Errors during ITR-UN filing can result in rejection, additional notices, or overpayment of tax. These are the most frequent mistakes observed in practice.

Paying Incorrect Additional Tax Amount

The most common mistake is computing the additional tax incorrectly. Many taxpayers calculate 25% (or the applicable rate) on the additional income instead of on the differential tax liability plus interest. The additional tax is assessed on the aggregate of differential tax and interest, not on the income. An incorrect amount means the challan will not match the portal computation, blocking the filing. Always follow the step-by-step computation: base tax difference, then interest, then additional tax percentage on the combined amount, then 4% cess.

Filing Before Challan Reflects in OLTAS

Taxpayers often pay Challan 280 and immediately try to file ITR-UN. However, the challan takes 2 to 3 working days to reconcile in the OLTAS system. If the portal cannot validate the challan, the return cannot be submitted. Check the payment status at e-Pay Tax > Payment History before attempting to file. Wait until the status shows "Booked" to proceed.

Selecting the Wrong Assessment Year

When multiple assessment years are open for updated returns, taxpayers sometimes select the wrong AY, resulting in a return that does not match the intended correction. Verify the assessment year against the financial year of the missed income. Income earned during FY 2023-24 corresponds to AY 2024-25. Income earned during FY 2022-23 corresponds to AY 2023-24. Cross-check the AY printed on the original return acknowledgement.

Not Verifying Against AIS Before Filing

Filing ITR-UN to declare one missed income while other unreported transactions remain in the AIS defeats the purpose. The department compares the updated return against all AIS data. If discrepancies remain after the ITR-UN, a notice is issued for the remaining difference. Download and review the complete AIS before filing, and ensure the updated return covers all unreported income, not just the item you discovered.

Attempting to File for Non-Eligible Situations

Some taxpayers try to use ITR-UN to claim missed deductions (under Section 80C, 80D, etc.) or to reduce their tax liability. The portal rejects such returns because the updated return must result in additional tax payment. If you need to claim a missed deduction, approach the Assessing Officer for rectification under Section 154 instead.

ITR-UN for Specific Taxpayer Categories

Salaried Individuals

Salaried employees are the largest category of ITR-UN filers. The most common scenario is unreported bank interest income, followed by missed capital gains from stock market or mutual fund transactions. Salaried taxpayers who switched jobs during the year and received salary from two employers sometimes report only one Form 16, leaving the second employer's salary unreported. If you had two Form 16s for the same financial year, ensure both are included. Additionally, interest on EPF withdrawals before 5 years of continuous service is taxable and often overlooked.

Business Owners and Professionals

Business owners file ITR-UN when they discover under-reported turnover, missed invoice receipts, or incorrectly claimed expenses. For professionals (doctors, lawyers, CAs, architects), common triggers include payments received from clients who did not deduct TDS (and therefore do not appear in Form 26AS) and income from multiple practice locations. The old vs new tax regime analysis for business owners can help determine the correct slab computation for your updated return.

NRIs (Non-Resident Indians)

NRIs file ITR-UN primarily for three categories of Indian income: capital gains on sale of Indian property, rental income from Indian real estate, and interest income from NRO bank accounts. NRI-specific issues include determining the correct residential status for the assessment year (which affects the applicable tax rates), claiming DTAA benefits correctly, and ensuring TDS credits from NRO accounts are properly reflected. NRIs should also check for any income from Indian partnerships, LLPs, or companies that was not reported in the original return.

Companies and LLPs

Corporate entities file ITR-UN when internal audits reveal under-reported revenue, wrong depreciation claims, incorrect MAT/AMT computation, or missed income from investments and deposits. For LLPs, the common trigger is under-reported professional fee income or incorrect allocation of partner remuneration. Companies must use ITR-6 as the base form and LLPs use ITR-5 for the updated return. The authorized director or designated partner signs and e-verifies using the entity's DSC. Read the guide on Private Limited company compliance for related annual filing obligations.

After Filing ITR-UN: What Happens Next

Once the updated return is filed and e-verified, the processing and assessment follow a defined timeline. Understanding the post-filing stages helps taxpayers plan for potential queries or proceedings.

Most ITR-UN filings are processed without further scrutiny. The department recognizes voluntary compliance positively. However, if the additional income disclosed is above ₹50 lakh, involves foreign assets, or relates to a category flagged for scrutiny (such as cryptocurrency gains), the return may undergo detailed assessment. Keep all supporting documents, computation worksheets, and the challan receipt readily accessible for at least 8 years after filing.

ITR-UN and the Vivad Se Vishwas Scheme

The Vivad Se Vishwas (Direct Tax) scheme offers a separate dispute resolution mechanism for cases where tax demands are pending in appeal. If you have a disputed demand for an assessment year and are also considering filing ITR-UN for additional income in the same AY, evaluate both options carefully. Filing under Vivad Se Vishwas may provide a lower settlement amount than the ITR-UN additional tax for specific dispute categories. Consult a tax professional to compare the costs before choosing one route over the other.

Impact of ITR-UN on Future Tax Compliance

Filing an updated return has implications beyond the immediate assessment year. Understand these downstream effects before filing.

Effect on Future Year Returns

If the additional income disclosed through ITR-UN is recurring (rental income, interest income, freelance income), you must report it in all subsequent year returns. The department tracks continuity, and failure to report recurring income in future years after disclosing it through ITR-UN will raise an immediate red flag.

Impact on Advance Tax Obligations

If the revised total income after ITR-UN results in a tax liability exceeding ₹10,000 in the current year, you are obligated to pay advance tax in quarterly instalments (15 June, 15 September, 15 December, and 15 March). Failure to pay advance tax attracts interest under Sections 234B and 234C. Assess whether the additional income disclosed through ITR-UN creates a recurring advance tax obligation going forward.

TDS Compliance Adjustments

If the missed income was subject to TDS that was not deducted (for example, rent received without tenant TDS), you should inform the payer about their TDS obligation for future payments. This protects both parties, as the payer avoids disallowance of the expense under Section 40(a)(ia), and you receive TDS credit in Form 26AS for future years.

Using IncorpX Tools for ITR-UN Preparation

IncorpX provides tools and services that simplify the updated return preparation process.

• Income Tax Calculator: Compute your revised total income and differential tax liability before paying Challan 280
• ITR Filing Service: End-to-end professional filing for updated returns across all assessment years
• New Income Tax Act 2025: Key Changes: Understand the broader changes under the new Act that affect updated returns
• Old vs New Tax Regime 2026: Determine which regime applies to your updated return computation
• Compliance Services: Post-filing compliance support including advance tax setup and TDS registration

Related Provisions Under the New Income Tax Act 2025

The updated return provision operates alongside several related sections. Understanding these connections provides a complete picture of your compliance obligations.

Frequently Asked Questions About Filing Updated Return

Below are answers to the most common questions taxpayers ask when considering an updated return under the new Income Tax Act 2025.

Can I file ITR-UN for cryptocurrency income I did not report?

Yes. Cryptocurrency income (from trading, staking, airdrops, or DeFi activities) that was not reported in the original return can be disclosed through ITR-UN. Since AY 2022-23, Virtual Digital Assets (VDA) are taxed at a flat 30% under Section 115BBH with no deduction for expenses other than cost of acquisition. 1% TDS under Section 194S applies on transfers above ₹10,000 (₹50,000 for specified persons). The AIS now captures crypto exchange data, making non-disclosure detectable. File ITR-UN to avoid the 200% under-reporting penalty plus prosecution risk.

What if the Income Tax Department already sent an intimation for the mismatch?

If you received an automated intimation or notice for AIS/TIS mismatch, you can still file ITR-UN provided no formal assessment proceedings have been initiated. The mismatch notice is typically a pre-assessment communication asking you to explain the discrepancy. Filing ITR-UN in response to a mismatch notice is treated as voluntary compliance. However, if a notice under Section 148 (reassessment) has been issued, consult a tax professional before deciding whether ITR-UN or responding to the notice is the better course of action.

Summary

ITR-UN under the new Income Tax Act 2025 provides taxpayers with an extended window of up to 60 months to declare additional income and correct past filing errors. The additional tax ranges from 25% (within 12 months) to 70% (within 60 months) of the aggregate tax and interest. File as early as possible within the first 12-month window to minimise costs. The process involves computing the additional tax, paying via Challan 280 on the e-filing portal, and submitting the ITR-UN form with e-verification. Review your AIS thoroughly before filing to ensure all unreported income is covered. For assessment years where the deadline is approaching (AY 2020-21 by 31 March 2026), act immediately.