CBDT Allows ITR-U Filing for FY 2021-22 and 2022-23: Who Can File Updated Returns and Deadlines Explained

The Central Board of Direct Taxes (CBDT) has announced a major relief for taxpayers. Those who missed filing their Income Tax Return (ITR) or made errors while submitting returns for the financial years 2021-22 and 2022-23 now have another chance. CBDT has enabled the filing of Updated Income Tax Returns (ITR-U) through ITR-3 and ITR-4 forms on the official e-filing portal.

With this update, taxpayers can file or revise their returns within 48 months (four years) from the end of the relevant assessment year. Earlier, this window was only 24 months. The extension offers taxpayers a broader time frame to correct mistakes or comply with pending obligations, reducing the chances of penalties or litigation.

What is ITR-U?

ITR-U is an Updated Income Tax Return, introduced as a flexible compliance option for individuals and businesses. It allows taxpayers to declare omitted income, correct errors, or file returns if they had missed the original deadline.

As per the Union Budget 2025, the filing window has been doubled from two years to four years, meaning taxpayers have until the end of the 48th month from the close of the financial year to make corrections. For example, if someone failed to file ITR for FY 2021-22, they now have until 2025 to submit an updated return.

Who Can File ITR-3 and ITR-4?

• ITR-3: This form is applicable to individuals and Hindu Undivided Families (HUFs) earning income from business or profession. If you have multiple income sources such as salary, house property rent, capital gains, and business income, you are required to file ITR-3.

• ITR-4 (Sugam): This simplified form is designed for small businesses and professionals with an annual income of up to ₹50 lakh. It is applicable for those who opt for the presumptive taxation scheme, and also includes income from salary, one house property, and interest earnings.

Who Can File ITR-U?

The facility of ITR-U is open to taxpayers who:

• Did not file their original return within the deadline.

• Filed a return earlier but made errors or left out certain income.

• Want to correct their tax records within the 48-month window.

For example, taxpayers who need to file for Assessment Year 2025-26 will be able to update their return until March 31, 2030.

Deadline and Penalties

CBDT has clarified that the last date to file an ITR-U is 48 months from the end of the financial year. Missing this window could result in additional tax liabilities, interest, and penalties.

Tax experts suggest filing updated returns as early as possible because delayed filings attract higher penalties. According to reports, the later you update, the more additional tax you may have to pay.

Why This Move Matters

The introduction of ITR-U is seen as a taxpayer-friendly reform that provides individuals and businesses a chance to voluntarily correct their mistakes without waiting for notices from the Income Tax Department. It encourages compliance while also reducing legal disputes.

Moreover, with the extension to four years, taxpayers get enough breathing room to reconcile their income details, cross-check bank statements, and ensure that no source of income is left undisclosed.

Key Takeaways

• ITR-U filing now available for FY 2021-22 and 2022-23 via ITR-3 and ITR-4 forms.

• Time limit extended to 48 months instead of 24 months.

• Beneficial for those who missed filing returns or made mistakes earlier.

• Late filing may attract additional tax and penalties.

• Last date for AY 2025-26 ITR-U filing is March 31, 2030.

This latest announcement by CBDT not only helps taxpayers avoid harsh penalties but also promotes greater transparency in the tax filing system. For those who missed earlier deadlines, the opportunity to file ITR-U could serve as a valuable lifeline to stay compliant.

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