Extended Time Limit for Filing Updated ITR (48 Months): FAQs

SEO Title: Extended Time Limit for Filing Updated ITR (48 Months)

Summary: Under Section 139(8A) of the Income-tax Act, taxpayers can file an updated return to disclose additional income beyond the deadline for revised returns, subject to additional tax. Previously, the time limit for filing an updated return was 24 months from the end of the relevant assessment year. The Finance Bill 2025 extends this limit to 48 months. The additional tax rates are revised: 25% for filings within 12 months, 50% within 24 months, 60% within 36 months, and 70% within 48 months. This extension aims to promote voluntary compliance and reduce litigation. However, updated returns cannot be filed in certain cases, such as when it results in a loss, reduces tax liability, or follows a tax search. Non-filers can also utilize this provision, with additional income-tax calculated on disclosed income.

FAQs – Budget 2025: Extending the time-limit to file the updated return

Q1. What is an updated return? Which section of Income-tax Act, 1961 deals with updated Income Tax Return (ITR)?

Ans. A taxpayer can file a revised return upto 31^st December of the assessment year. However, at present if the taxpayer wants to disclose additional income, then he can file an updated return (subject to certain restrictions) upto 24 months from the end of the relevant assessment year on payment of additional income-tax. This is provided by facility of filing updated return as per section 139(8A) of the Income Tax Act ,1961.

Q.2 What are the rates for additional income-tax and also time-lines for filing updated return prior to Finance Bill 2025?

Ans. An additional income-tax of 25% of aggregate of tax and interest on the additional income disclosed in the updated ITR is to be paid for updated return filed after the last date of filing revised ITR and such updated return is to be filed upto 12 months from the end of the relevant assessment year.

For updated return filed after expiry of 12 months from the end of relevant assessment year and upto 24 months from the end of the relevant assessment year, the said additional income-tax liability is calculated at the rate of 50% of aggregate of tax and interest on additional income disclosed in the updated ITR.

Q.3 What are the amended time lines for filing updated return by the Finance Bill 2025?

Ans. The updated return can now be filed upto 48 months from the end of relevant assessment year.

Q.4 What is the additional income-tax that is to be paid for filing updated return after expiry of 24 months from the end of relevant assessment year upto 36 months from the end of relevant assessment year as per the amendment brought in section 140B (3) of the Income-tax Act,1961 in Finance Bill 2025?

Ans. 60% of aggregate of tax and interest payable on additional income disclosed in the updated ITR.

Q.5 What is the additional income-tax that is to be paid for filing updated return after expiry of 36 months from the end of relevant assessment year upto 48 months from the end of relevant assessment year as per the amendment brought in section 140B(3) of the Income-tax Act,1961 in Finance Bill 2025?

Ans. 70% of aggregate of tax and interest payable on additional income disclosed in the updated ITR.

Q.6 What is the rationale for updated return upto 48 months as per the amendment brought in section 139(8A) of the Income-tax Act,1961 in Finance Bill 2025?

Ans. This is in line with the philosophy of ‘Trust First’. The facility of updated return upto 48 months will enhance voluntary compliance.

Q.7 Can a taxpayer file more than one updated ITR?

Ans. No. The taxpayer cannot file more than one updated ITR for one relevant assessment year. However, one updated return for every separate assessment year can be filed.

Q.8 Can a taxpayer file updated ITR after filing revised ITR?

Ans. Yes, a taxpayer after filing revised return can file updated return.

He can file updated return for previous year at any time within 48 months from the end of relevant assessment year as per Finance Bill 2025 amendment.

Q.9 Can a non-filer taxpayer file updated ITR? If yes, what will be his additional income-tax liability?

Ans. Yes, a non-filer taxpayer can file updated ITR at any time for the previous year within 48 months from the end of relevant assessment year.

The additional income-tax liability for on additional income disclosed in the updated ITR in different years is as below: –

(i) 1st Year (within 12 months from the end of relevant assessment year), it will be 25 % of the aggregate of tax and interest payable.

(ii) 2nd Year (after expiry of 12 months from the end of relevant assessment year within 24 months from the end of relevant assessment year), it will be 50 % of the aggregate of tax and interest payable.

(iii) 3rd Year (after expiry of 24 months from the end of relevant assessment year within 36 months from the end of relevant assessment year), it will be 60 % of the aggregate of tax and interest payable.

(iv) 4th Year (after expiry of 36 months from the end of relevant assessment year within 48 months from the end of relevant assessment year), it will be 70 % of the aggregate of tax and interest payable.

Q.10 Why was there a need to extend the updated ITR from current 24 months to upto 48 months from the end of the relevant assessment year?

Ans. The government’s philosophy is to Trust the taxpayer. It is intended that voluntary compliances are increased and taxpayers should come forward with true disclosure of their income and should utilize the facility of filing updated return instead of going through the prolonged process of assessment/reassessment proceedings.

This will also reduce litigation cost and time of taxpayers and Income Tax Department.

Q.11 Under what circumstances, updated return cannot be filed?

Ans. A taxpayer cannot file updated return in certain cases, some of which are listed below: –

• Where updated return is return of loss
• Has the effect of decreasing the total tax liability determined on the basis of return furnished under section 139(1),139(4) or 139(5) of the Act.
• Results in refund or increases the refund due on the basis of return furnished under section 139(1),139(4) or 139(5) of the Act.
• If search has been initiated under section 132 of the Act etc.

1st, 2^nd and 3^rd proviso of section 139(8A) of the Act provides restriction on filing updated return in detail.

Q.12 Are there any additional requirements to file updated return after expiry of 24 months from the end of relevant assessment year upto 36 months from the end of relevant assessment year as per the amendment brought in section 140B (3) of the Income-tax Act,1961 in Finance Bill 2025?

Ans. No, there are no additional requirements. However, a taxpayer has to pay additional income-tax amounting to 60% of aggregate of tax and interest payable on additional income disclosed in the updated ITR if he wants to file update return after expiry of 24 months from the end of relevant assessment year upto 36 months from the end of relevant assessment year.

Q.13 In case of non-filer, what shall be taken as additional income?

Ans. Any income over and above the maximum amount which is not chargeable to income-tax shall be taken as additional income for the purposes of filing updated return by a non-filer.

Q.14 Can a taxpayer file updated return where any notice to show-cause under section 148A has been issued in his case after thirty-six months from the end of the relevant assessment year?

Ans. As per Finance bill 2025 amendment, no updated return shall be furnished by any person where any notice to show-cause under section 148A has been issued in his case after thirty-six months from the end of the relevant assessment year.

However, where subsequently an order is passed under sub-section (3) of section 148A determining that it is not a fit case to issue notice under section 148, updated return may be filed upto 48 months from the end of the relevant assessment year.