Income Tax department enables updated returns filing in ITR-3, ITR-4 for AY2021-22 & 2022-23
Introduced under Section 139(8A) of the Income Tax Act, 1961, the updated return framework allows taxpayers to declare income that was earlier under-reported, reported under the wrong head, or not reported at all.
- Aug 19, 2025,
- Updated Aug 19, 2025 2:34 PM IST
The Income Tax Department has announced that taxpayers can now file updated income tax returns (ITR-U) for the assessment years (AY) 2021-22 and 2022-23 using ITR-3 and ITR-4 forms. The facility was rolled out through an official update on the department’s X (formerly Twitter) handle, giving individuals and businesses another opportunity to rectify errors, omissions, or missed filings in earlier years.
Introduced under Section 139(8A) of the Income Tax Act, 1961, the updated return framework allows taxpayers to declare income that was earlier under-reported, reported under the wrong head, or not reported at all. Taxpayers may also use it to adjust unabsorbed depreciation or incorrect tax credits. However, filing an ITR-U comes with a cost: an additional tax liability of up to 50% of the extra tax and interest payable.
Who should file ITR-3?
The ITR-3 form is relevant for individuals and Hindu Undivided Families (HUFs) with income from business or profession, share trading (including futures and options), partnership in a firm, capital gains, foreign assets or income, or unlisted equity shares. It also applies to taxpayers with income exceeding ₹50 lakh who do not qualify for simpler forms like ITR-1, ITR-2, or ITR-4.
For FY 2024-25, ITR-3 has been enhanced with new reporting features, including:
Split capital gains reporting for transactions before and after July 23, 2024
Claiming capital loss on share buyback against corresponding dividend income
Higher reporting threshold for assets and liabilities if income exceeds ₹1 crore
New section for cruise business income (Section 44BBC)
Detailed reporting under Sections 80C and 10(13A)
TDS section code reporting in Schedule-TDS
Who should file ITR-4?
The ITR-4 form (Sugam) is meant for resident individuals, HUFs, and firms (excluding LLPs) with income up to ₹50 lakh, where income is computed under presumptive taxation schemes (Sections 44AD, 44ADA, and 44AE). It also allows reporting of long-term capital gains under Section 112A up to ₹1.25 lakh.
Taxpayers, however, cannot use ITR-4 if they are company directors, hold unlisted shares, have foreign assets or income, earn agricultural income above Rs 5,000, or have deferred tax from ESOPs.
Wider rollout of ITR-U facility
In July 2025, the Income Tax Department had already enabled updated return filing through ITR-1 and ITR-2, in line with the Finance Act, 2025. The Union Budget 2025 extended the filing window for ITR-U to 48 months from the end of the relevant assessment year, offering taxpayers more time to fix past mistakes.
Who cannot file ITR-U?
Certain restrictions apply. Taxpayers cannot file ITR-U if:
The return would be nil or a loss return
It reduces tax liability or increases refunds
It relates to search and seizure cases or ongoing prosecution
Additionally, the e-filing portal permits only one updated return per AY, making it important to get disclosures right the first time.
Deadline for ITR-U filing
As per the current rules, taxpayers have 48 months from the end of the relevant fiscal year to submit an updated return. For AY 2025-26, the deadline is March 31, 2030.
With this expansion to ITR-3 and ITR-4, the I-T department has widened the scope of compliance, encouraging voluntary disclosure while ensuring higher transparency in the tax system.
The Income Tax Department has announced that taxpayers can now file updated income tax returns (ITR-U) for the assessment years (AY) 2021-22 and 2022-23 using ITR-3 and ITR-4 forms. The facility was rolled out through an official update on the department’s X (formerly Twitter) handle, giving individuals and businesses another opportunity to rectify errors, omissions, or missed filings in earlier years.
Introduced under Section 139(8A) of the Income Tax Act, 1961, the updated return framework allows taxpayers to declare income that was earlier under-reported, reported under the wrong head, or not reported at all. Taxpayers may also use it to adjust unabsorbed depreciation or incorrect tax credits. However, filing an ITR-U comes with a cost: an additional tax liability of up to 50% of the extra tax and interest payable.
Who should file ITR-3?
The ITR-3 form is relevant for individuals and Hindu Undivided Families (HUFs) with income from business or profession, share trading (including futures and options), partnership in a firm, capital gains, foreign assets or income, or unlisted equity shares. It also applies to taxpayers with income exceeding ₹50 lakh who do not qualify for simpler forms like ITR-1, ITR-2, or ITR-4.
For FY 2024-25, ITR-3 has been enhanced with new reporting features, including:
Split capital gains reporting for transactions before and after July 23, 2024
Claiming capital loss on share buyback against corresponding dividend income
Higher reporting threshold for assets and liabilities if income exceeds ₹1 crore
New section for cruise business income (Section 44BBC)
Detailed reporting under Sections 80C and 10(13A)
TDS section code reporting in Schedule-TDS
Who should file ITR-4?
The ITR-4 form (Sugam) is meant for resident individuals, HUFs, and firms (excluding LLPs) with income up to ₹50 lakh, where income is computed under presumptive taxation schemes (Sections 44AD, 44ADA, and 44AE). It also allows reporting of long-term capital gains under Section 112A up to ₹1.25 lakh.
Taxpayers, however, cannot use ITR-4 if they are company directors, hold unlisted shares, have foreign assets or income, earn agricultural income above Rs 5,000, or have deferred tax from ESOPs.
Wider rollout of ITR-U facility
In July 2025, the Income Tax Department had already enabled updated return filing through ITR-1 and ITR-2, in line with the Finance Act, 2025. The Union Budget 2025 extended the filing window for ITR-U to 48 months from the end of the relevant assessment year, offering taxpayers more time to fix past mistakes.
Who cannot file ITR-U?
Certain restrictions apply. Taxpayers cannot file ITR-U if:
The return would be nil or a loss return
It reduces tax liability or increases refunds
It relates to search and seizure cases or ongoing prosecution
Additionally, the e-filing portal permits only one updated return per AY, making it important to get disclosures right the first time.
Deadline for ITR-U filing
As per the current rules, taxpayers have 48 months from the end of the relevant fiscal year to submit an updated return. For AY 2025-26, the deadline is March 31, 2030.
With this expansion to ITR-3 and ITR-4, the I-T department has widened the scope of compliance, encouraging voluntary disclosure while ensuring higher transparency in the tax system.