income tax

Understanding Section 139(8A): Updated Returns Under Income Tax Act

Understanding Updated Returns under Section 139(8A) of the Income Tax Act, 1961

The Income Tax Act, 1961 allows individuals to file an Updated Return under Section 139(8A), regardless of prior submissions under sub-sections (1), (4), or (5) for the respective assessment year, whether concerning their income or that of others assessed for the previous year. The Finance Act, 2025 has extended the deadline for filing an updated return from 24 months (2 years) to 48 months (4 years) after the conclusion of the relevant assessment year. This return is to be filed using Form ITR-U.

Exclusions for Updated Returns

Certain conditions prohibit the filing of an Updated Return under this subsection:

  • An updated return cannot be filed if it:
    • (a) reflects a return of loss,
    • (b) reduces the total tax liability established in previously submitted returns under sub-sections (1), (4), or (5),
    • (c) results in a refund or increases the refund amount based on earlier returns under the same sub-sections.

Additionally, eligibility to file an updated return is limited under the following circumstances:

  • If a search has started under Section 132 or if assets or documents are requisitioned under Section 132A for that individual.
  • If a survey, excluding that conducted under sub-section (2A) of Section 133A, has been carried out involving that individual.
  • If notification regarding the seizure or requisition of assets, books, or documents under Section 132 or Section 132A has been issued.
  • If any assessment year preceding the year of search involves that taxpayer, and related documents are subject to seizure or requisition.
  • If an updated return diminishes carried forward losses, unabsorbed depreciation, or tax credits for subsequent years, affected taxpayers must file updated returns for each respective year.

Tax on Updated Return

The additional tax for filing an updated return increases with time delays:

  • Within 12 months: 25% of additional tax (tax + interest)
  • Within 24 months: 50%
  • Within 36 months: 60%
  • Within 48 months: 70%

(Effective from April 1, 2025)

Further Restrictions on Filing Updated Returns

No individual may submit an updated return for the assessment year if:

  1. They have already filed an updated return for that year.

  2. There are ongoing or finalized assessment, reassessment, recomputation, or revision proceedings under the Act for that assessment year.

  3. The Assessing Officer has received information regarding that individual for the assessment year from statutory acts against smuggling, money laundering, and undisclosed foreign assets, including:

    • The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976)
    • The Prohibition of Benami Property Transactions Act, 1988 (45 of 1988)
    • The Prevention of Money-laundering Act, 2002 (15 of 2003)
    • The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015)

  4. Information pertaining to the assessment year has been acquired under treaties mentioned in Section 90 or Section 90A prior to filing an updated return.

  5. Prosecution proceedings under Chapter XXII have started for the relevant assessment year before filing the updated return.

  6. The individual belongs to a specific class of individuals designated by the Board in this context.

Conditions for Allowing Updated Returns

Taxpayers who incurred a loss in any previous year, provided they filed a loss return within the timeframe stipulated under sub-section (1), verified correctly, and included all required particulars, are eligible to file an updated return if it qualifies as a return of income.

Additionally, if an updated return for a past year affects the carrying forward of losses under Chapter VI, unabsorbed depreciation under sub-section (2) of Section 32, or tax credits under sections 115JAA or 115JD for future assessment years, updated returns must be filed for each subsequent assessment year impacted.

This framework ensures that the possibility of updating returns exists while safeguarding the integrity of the assessment process under the Income Tax Act.