Missed your ITR deadline? You still have 3 options but one may cost 70% more in tax

Missed the income tax return (ITR) deadline or forgot to disclose income? Taxpayers still have three options—but one of them could cost up to 70% in additional tax, warns Sujit Bangar of TaxBuddy.com.

In a detailed post on LinkedIn, Bangar outlines three post-deadline paths available to Indian taxpayers: Belated Return, Revised Return, and the costliest—ITR-U (Updated Return).

The Belated Return, filed under Section 139(4), remains valid and is processed like a normal return. It's available until December 31 of the relevant assessment year, provided assessment hasn’t begun. But it comes at a cost: a late fee of ₹5,000 for incomes over ₹5 lakh, and ₹1,000 for those below, plus interest under Section 234A. Importantly, taxpayers forfeit carry-forward of most losses and several key deductions.

Despite these penalties, Bangar says it’s still “worth it” to file, as it validates TDS/TCS credits and avoids escalation to the more punitive ITR-U.

Those who discover errors after filing can opt for a Revised Return—even if the original was belated. This too must be filed by December 31 or before assessment.

The final and most punitive route is ITR-U, used when both previous deadlines are missed or unreported income is found later. While the Finance Act 2025 now allows filing within 48 months, this option carries heavy penalties: 25% to 70% additional tax on the total tax and interest due, depending on how late the correction is made.

“Treat ITR-U as a last resort, not a planning tool,” Bangar cautioned, noting that it cannot be used to reduce tax, declare losses, or claim refunds.

Taxpayers have been advised to act promptly: file belated returns if eligible, revise if necessary, and reserve ITR-U only for unavoidable lapses.