The Finance Bill, 2026 proposes to extend the time limit for filing a revised income-tax return to provide taxpayers with greater flexibility to correct errors. Under the existing framework, a revised return could be filed only within nine months from the end of the relevant tax year, which coincided with the deadline for belated returns. This often left taxpayers who filed belated returns at the last moment with no opportunity to revise them. To address this hardship, it is proposed to extend the revised return filing period from nine months to twelve months from the end of the relevant tax year. The amendment allows rectification of omissions or wrong statements relating to income, deductions, exemptions, or losses. However, a graded fee is proposed for revised returns filed beyond nine months, linked to the taxpayer’s total income. Parallel amendments are proposed under both the Income-tax Act, 2025 and the Income-tax Act, 1961. These changes aim to improve compliance, reduce disputes, and take effect from tax year 2026–27.
Extending the period of filing revised return
Section 263 of the Income-tax Act, 2025 deals with filing of Income-tax return by taxpayers. The said section prescribes the comprehensive framework that lays down class of persons who are required to file a return, the due dates, and the different types of returns that may be furnished. It covers the original return, belated return, revised return and updated return.
2. Further, section 263(5) of the Act provides for the revised return of income. It allows a person who has already furnished a return under section 263(1) and (4) to file a revised return, if any omission or wrong statement is discovered in the original or belated return. Such revised return required to be furnished within nine months from the end of the relevant tax year or before completion of assessment, whichever is earlier.
3. Section 263(5) allows a taxpayer to revise an original or belated return to rectify any omission or wrong statement, relating to income, deductions, exemptions, losses, or any other particulars.
4. It is considered to increase the prescribed time limit for filing the revised return from existing 9 months to 12 months from the end of the relevant tax year. As presently, the timeline for revised and belated return coincides with each other which is nine months from the end of the relevant tax year. Hence, a person who is filing his belated return at the end was not having the opportunity to revise his return of income. The extension of time limit for filing revised return of income, will allow the taxpayers to file revised return where belated return is filed at the end.
5. In this regard, it is proposed to amend section 263(5) of the Act so as to increase the prescribed time limit for filing the revised return from its existing time limit of nine months to twelve months from the end of the relevant tax year. Further, a fee is also proposed under section 428(b), for revised returns which are filed beyond nine months from the end of relevant tax year.
6. These amendments will take effect from 1st day of April 2026 for tax year 2026-27 and subsequent years.
7. Further, section 263 corresponds to section 139 of the Income-tax Act, 1961. Therefore, similar amendments are also proposed in section 139(5) of the Income-tax Act, 1961. Further, a fee is also proposed under section 234I. It is proposed that these amendments shall come into force from the 1st day of March 2026 in Income-tax Act 1961 and shall be applicable for Assessment year 2026-27 (previous year 2025-26).
[Clause 5, 12, 57, 83]
Extract of Relevant Clauses of Finance Bill, 2026
Clause 5 of the Bill seeks to amend section 139 of the Income-tax Act, 1961 relating to return of income.
Explanation 2 to sub-section (1) of said section provides definition for “due date” to mean the last date for filing the return by different classes of assessee or person for the assessment year, with different conditions applied therein.
It is proposed to substitute the said Explanation so as to provide that for the purposes of this sub-section “due date” means in respect of the persons mentioned in column B of the Table below, subject to the conditions as mentioned in column C of the said Table, shall be the due date of assessment year as mentioned in column D thereof:
TABLE
| Sl. No. | Person | Conditions | Due date |
| A | B | C | D |
| 1. | Assessee, including the partners of the firm or the spouse of such partner (if section 5A applies to such spouse). | Where the provisions of section 92E apply. | 30th November. |
| 2. | (i) Company; (ii) Assessee (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; (iii) partner of a firm whose accounts are required to be audited under this Act or under any other law in force or the spouse of such partner (if section 5A applies to such spouse). |
Where the provisions of section 92E do not apply. | 31st October. |
| 3. | (i) Assessee having income from profits and gains of business or profession whose accounts are not required to be audited under this Act or under any other law for the time being in force; (ii) partner of a firm whose accounts are not required to be audited under this Act or under any other law in force or the spouse of such partner (if section 5A applies to such spouse). |
Where the provisions of section 92E do not apply. | 31st August. |
| 4. | Any other assessee. | — | 31st July. |
Sub-section (5) of the said section of the said Act deal with the revised return of income. It allows a person who has already furnished a return under sub-sections (1) and (4) of the said section to file a revised return, if any omission or wrong statement is discovered in the original or belated return. Such revised return must be furnished at any time before three months prior to the end of relevant assessment year or before completion of assessment, whichever is earlier.
It is further proposed to substitute said sub-section to provide that if any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may, subject to the provisions of section 234-I, furnish a revised return at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
Sub-section (8A) of the said section provides for updated return of Income. It allows a taxpayer, whether or not a return was furnished earlier, to file an updated return within forty-eight months from the end of the financial year succeeding the relevant tax year. This provision is meant to promote voluntary compliance on the part of taxpayer to offer the income for taxation.
It is proposed to provide for filing updated return for reducing the loss in specified circumstances. Also, an updated return may be furnished by a person for the relevant assessment year in pursuance of a notice under section 148 within such period as specified in the said notice and in such a case, the assessee shall be precluded from filing return in pursuance of the said notice in any other manner.
These amendments will take effect retrospectively from 1st March, 2026.
Clause 12 of the Bill seeks to insert section 234-I after section 234H of the Income-tax Act, 1961, relating to fee for default in furnishing revised return of income.
It is proposed to levy of fee amounting to five thousand rupees for revising the return after nine months from the end of relevant previous year where the total income is more than five lakh rupees, and a fee of one thousand rupees for revising the return after nine months from the end of relevant previous year where the total income is less than five lakh rupees.
This amendment will take effect retrospectively from 1st March, 2026.
Clause 57 of the Bill seeks to amend section 263 of the Income-tax Act, 2025 relating to return of income.
Clause (c) of sub-section (1) of said section defines the expression “due date” as the date of the financial year succeeding the relevant tax year for filing the return of income by different classes of assessee or person with different conditions applied therein.
It is proposed to substitute said clause (c) for the purposes of this section “due date” in respect of the persons mentioned column B of the Table below, subject to the conditions mentioned in column C of the said Table, shall be the due date of the financial year succeeding the relevant tax year as mentioned in column D thereof:
| Sl. No. | Person | Conditions | Due date |
| A | B | C | D |
| 1. | Assessee, including the partners of the firm or the spouse of such partner (if section 10 applies to such spouse). | Where the provisions of section 172 apply. | 30th November. |
| 2. | (i) Company; (ii) Assessee (other than a company) whose accounts are required to be audited under this Act or under any other law in force; (iii) partner of a firm whose accounts are required to be audited under this Act or under any other law in force; or the spouse of such partner (if section 10 applies to such spouse). |
Where the provisions of section 172 do not apply. | 31st October. |
| 3. | (i) Assessee having income from profits and gains of business or profession whose accounts are not required to be audited under this Act or under any other law in force; (ii) partner of a firm whose accounts are not required to be audited under this Act or under any other law in force or the spouse of such partner (if section 10 applies to such spouse). |
Where the provisions of section 172 do not apply. | 31st August. |
| 4. | Any other assessee. | — | 31st July. |
Sub-section (5) of the said section deals with the revised return of income. It allows a person who has already furnished a return under section 263(1) and (4) to file a revised return, if any omission or wrong statement is discovered in the original or belated return. Such revised return required to be furnished within nine months from the end of the relevant tax year or before completion of assessment, whichever is earlier.
It is further proposed to amend the said section so as to increase the prescribed time limit for filing the revised return from its existing time limit of nine months to twelve months from the end of the relevant tax year.
The said section provides for comprehensive framework that lays down the class of persons who are required to file a return, the due dates, and the different types of returns that may be furnished. It covers the original return, belated return, revised return and updated return.
Sub-section (6) of the said section provides for the updated return of income. It allows a taxpayer, whether or not a return was furnished earlier, to file an updated return within forty-eight months from the end of the financial year succeeding the relevant tax year. This provision promotes voluntary compliance on the part of taxpayer to offer the income for taxation.
Sub-clause (v) of clause (c) of the said sub-section prohibits filing of updated return in such cases where any proceedings for assessment or reassessment or recomputation or revision of income is pending or has been completed for the said tax year.
It is proposed to amend the said sub-section so that an updated return may be furnished by a person for the relevant tax year in pursuance of a notice issued under section 280 within such period as specified in the said notice and in such a case, the assessee shall be precluded from filing of return in pursuance of the said notice in any other manner.
It is also proposed to provide the filing of updated return for reducing the loss in specified circumstances.
It is also proposed to amend clause (e) of sub-section (6) of the said section so as to give the reference of “206(3) and (4)” instead of “206(l)(m) to (p)”.
These amendments will take effect from 1st April, 2026.
Clause 83 of the Bill seeks to substitute sections 427 and 428 of the Income-tax Act relating to fee for default in furnishing statements and fee for default in furnishing return of income.
The proposed section 427 provides for fee for default in furnishing statements.
Sub-section (1) of the proposed section 427 provides that without prejudice to the provisions of this Act, where any person fails to deliver or cause to be delivered a statement as per section 397(3)(b) within the time as may be provided by rules therein, he shall be liable to pay by way of fee, a sum of ₹200 for every day for which such failure continues.
Sub-section (2) of the proposed section 427 provides that the amount of fee referred to in sub-section (1) shall not exceed the amount of tax deductible or collectible and be paid before delivering or causing to be delivered the statement, as per sub-section (1).
Sub-section (3) of the proposed section 427 provides that without prejudice to the provisions of this Act, if any person who is required to furnish a statement of financial transaction or reportable account under section 508(1), fails to furnish such statement within the time as may be provide by rules under section 508(2), he shall be liable to pay by way of fee, a sum of ₹ 200 for every day for which such failure continues and such fee shall not exceed a sum of ₹ 100000.
The proposed section 428 provides for fee for default in furnishing return of income, audited accounts and reports.
Clause (a) of the proposed section 428 provides that where any person required to furnish a return of income under section 263, fails to do so within the due date as specified in subsection (1) of said section, he shall be liable to pay by way of fee, a sum of ₹ 1000, if the total income of such person does not exceed ₹ 500000 and a sum of ₹ 5000, in any other case.
Clause (b) of the proposed section 428 provides that where any person furnishes a return of income under section 263(5) beyond nine months from the end of relevant tax year, he shall liable to pay by way of fee, a sum of ₹ 1000, if the total income of such person does not exceed ₹ 500000 and a sum of ₹ 5000, in any other case.
Clause (c) of the proposed section 428 provides that where any person fails to get his accounts audited for any tax year or years and furnish the report of such audit as required under section 63, he shall be liable to pay by way of fee, a sum of ₹ 75000 for a delay upto one month for which such failure continue and a sum of ₹ 150000 thereafter.
Clause (d) of the proposed section 428 provides that where any person fails to furnish a report from an accountant as required by section 172, he shall be liable to pay by way of fee, a sum of ₹ 50000 for a delay up to one month for which such failure continues and a sum of ₹ 100000 thereafter.
These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years.
Extract of Relevant Amendment Proposed by Finance Bill, 2026
5. Amendment of section 139.
In section 139 of the Income-tax Act, with effect from the 1st day of March, 2026,––
(a) in sub-section (1), for Explanation 2, the following Explanation shall be substituted and shall be deemed to have been substituted, namely:––
‘Explanation 2.––For the purposes of this sub-section, “due date” in respect of the persons mentioned in column B of the Table below, subject to the conditions as mentioned in column C of the said Table, shall be the due date of assessment year as mentioned in column D thereof:
TABLE
| Sl. No. | Person | Conditions | Due date |
| (A) | (B) | (C) | (D) |
| 1. | Assessee, including the partners of the firm or the spouse of such partner (if section 5A applies to such spouse). | Where the provisions of section 92E apply. | 30th November. |
| 2. | (i) Company;
(ii) Assessee (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; (iii) partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force or the spouse of such partner (if section 5A applies to such spouse). |
Where the provisions of section 92E do not apply. | 31st October. |
| 3. | (i) Assessee having income from profits and gains of business or profession whose accounts are not required to be audited under this Act or under any other law for the time being in force;
(ii) partner of a firm whose accounts are not required to be audited under this Act or under any other law for the time being in force or the spouse of such partner (if section 5A applies to such spouse). |
Where the provisions of section 92E do not apply. | 31st August. |
| 4. | Any other assessee. | — | 31st July. |
(b) for sub-section (5), the following sub-section shall be substituted and shall be deemed to have been substituted, namely:––
“(5) If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may, subject to the provisions of section 234-I, furnish a revised return at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.”;
(c) in sub-section (8A),––
(i) in the first proviso, in item (i), after the words “return of a loss”, the words “except in a case referred to in the sixth proviso” shall be inserted;
(ii) in the third proviso, in item (b), after the words “in his case”, the words “except in a case referred to in the eighth proviso” shall be inserted;
(iii) in the sixth proviso, after the words “return of income”, the words “or such updated return has the effect of reducing the loss” shall be inserted;
(iv) after the seventh proviso, the following proviso shall be inserted, namely:––
“Provided also that an updated return may be furnished by a person for the relevant assessment year in pursuance of a notice under section 148 within such period as specified in the said notice and in such a case, the assessee shall be precluded from filing return in pursuance of the said notice in any other manner.”.
12. Insertion of new section 234-I.
After section 234H of the Income-tax Act, the following section shall be inserted and shall be deemed to have been inserted, with effect from the 1st day of March, 2026, namely:––
“234-I. Fee for furnishing revised return of income.
Without prejudice to the provisions of this Act, where any person furnishes a return of income under sub-section (5) of section 139, beyond nine months but before twelve months from the end of the relevant assessment year, he shall pay by way of a fee,––
(a) a sum of one thousand rupees, if the total income of such person does not exceed five lakh rupees;
(b )a sum of five thousand rupees, in any other case.”.
Amendment of section 263.
In section 263 of the Income-tax Act,––
(a) in sub-section (1), for clause (c), the following clause shall be substituted, namely:––
‘(c) for the purposes of this section, “due date” in respect of the persons mentioned in column B of the Table below, subject to conditions as mentioned in column C of the said Table, shall be the due date of the financial year succeeding the relevant tax year as mentioned in column D thereof:
TABLE
| Sl. No. | Person | Conditions | Due date |
| (A) | (B) | (C) | (D) |
| 1. | Assessee, including the partners of the firm or the spouse of such partner (if section 10 applies to such spouse). | Where the provisions of section 172 apply. | 30th November. |
| 2. | (i) Company;(ii) Assessee (other than a company) whose accounts are required to be audited under this Act or under any other law in force;
(iii) partner of a firm whose accounts are required to be audited under this Act or under any other law in force; or the spouse of such partner (if section 10 applies to such spouse). |
Where the provisions of section 172 do not apply. | 31st October. |
| 3. | (i) Assessee having income from profits and gains of business or profession whose accounts are not required to be audited under this Act or under any other law in force;(ii) partner of a firm whose accounts are not required to be audited under this Act or under any other law in force or the spouse of such partner (if section 10 applies to such spouse). | Where the provisions of section 172 do not apply. | 31st August. |
| 4. | Any other assessee. | — | 31st July. |
(b) for sub-section (5), the following sub-section shall be substituted, namely:––
“(5) If any person, having furnished a return under sub-section (1) or (4), discovers any omission or any wrong statement therein, he may, subject to the provisions of section 428(b), furnish a revised return at any time within twelve months from the end of the relevant tax year, or before the completion of the assessment, whichever is earlier.”;
(c) in sub-section (6),––
(i) for clause (b), the following clause shall be substituted, namely:––
“(b) (i) the provisions of clause (a) shall continue to apply for a tax year if any person has sustained a loss in the said tax year and has furnished a return of loss within the due date specified under subsection (1) and the updated return is a return of income or such updated return has the effect of reducing the loss;
(ii) the provisions of clause (a) shall also apply where an updated return is furnished by a person for the relevant tax year in pursuance of a notice issued under section 280 within such period as specified in the said notice and in such a case, the assessee shall be precluded from filing return in pursuance of the said notice in any other manner;”;
(ii) in clause (c),––
(A) in sub-clause (i), after the words “tax year”, the words, brackets, figures and letter “except in a case referred to in sub-section (6) (b) (i)” shall be inserted;
(B) in sub-clause (v), after the words “tax year” the words, brackets, figures and letter “except in a case referred to in sub-section (6) (b) (ii)” shall be inserted;
(iii) in clause (e), for the figures, brackets, letters and words “206(1)(m) to (p) and 206(2)(e) to (h)”, the figures, brackets, letters and words “206(2)(e) to (h) and 206(3) and (4)” shall be substituted.
83. Substitution of new sections for sections 427 and 428.
For sections 427 and 428 of the Income-tax Act, the following sections shall be substituted, namely:––
“427. Fee for default in furnishing return of income, audited accounts and reports.
(1) Without prejudice to the provisions of this Act, where any person fails to deliver or cause to be delivered a statement as per section 397(3)(b) within the time prescribed therein, he shall be liable to pay by way of fee, a sum of ₹ 200 for every day for which such failure continues.
(2) The amount of fee referred to in sub-section (1) shall–
(a) not exceed the amount of tax deductible or collectible; and
(c) be paid before delivering or causing to be delivered the statement, as per sub-section (1).
(3) Without prejudice to the provisions of this Act, where any person who is required to furnish a statement of financial transaction or reportable account under section 508(1), fails to furnish such statement within the time prescribed under section 508(2), he shall be liable to pay by way of fee, a sum of ₹ 200 for every day for which such failure continues and such fee shall not exceed a sum of ₹ 100000.
428. Fee for default in furnishing return of income, audited accounts and reports.
Without prejudice to the provisions of this Act, where any person–
(a) required to furnish a return of income under section 263, fails to do so within the due date, as specified under sub-section (1) of the said section, he shall be liable to pay by way of fee,––
(i) a sum of ₹ 1000, if the total income of such person does not exceed ₹ 500000; and
(ii) a sum of ₹ 5000, in any other case;
(b) furnishes a return of income under section 263(5) beyond nine months from the end of relevant tax year, he shall be liable to pay by way of fee,––
(i) a sum of ₹ 1000, if the total income of such person does not exceed ₹ 500000; and
(ii) a sum of ₹ 5000, in any other case;
(c) fails to get his accounts audited for any tax year or years and furnish the report of such audit as required under section 63, he shall be liable to pay by way of fee,––
(i) a sum of ₹ 75000 for a delay up to one month for which such failure continues; and
(ii) a sum of ₹ 150000 thereafter;
(d) fails to furnish a report from an accountant as required by section 172, he shall be liable to pay by way of fee,––
(i) a sum of ₹ 50000 for a delay up to one month for which such failure continues; and
(ii) a sum of ₹ 100000 thereafter.”.
