As the December 31 deadline looms, taxpayers who failed to meet the original income tax return (ITR) deadline are facing a narrowing set of choices. This
date marks the last chance to file a revised/belated ITR return. Once the window shuts, taxpayers lose a relatively flexible option and are pushed into more expensive compliance routes, often involving higher tax payouts and fewer benefits. Missing this deadline means any correction or disclosure must be made through an updated return under Section 139(8A) of the Income Tax Act. While the law allows updated returns for up to 48 months after the end of the assessment year, experts caution that this route is far from neutral. Additional taxes, reduced or forfeited refunds, and the loss of certain tax advantages are common outcomes. Advisors consistently note that delays or confusion at this stage can transform a minor oversight into a costly error. Understanding The Revised Return Option In recent months, the income tax department has issued multiple notices highlighting mismatches between filed ITRs, Form 16, and Annual Information Statements. Issues have ranged from incorrect income figures to incomplete disclosures related to political donations or foreign assets, often resulting in stalled refunds. For taxpayers who filed their returns on time but later spotted mistakes, a revised return under Section 139(5) offers a way to correct them. Around 21 lakh taxpayers have already availed of this option. A revised return completely replaces the original filing and can be submitted multiple times, provided it is done before December 31 or before assessment completion. Importantly, revised returns do not automatically attract penalties unless there is misreporting. Losses can be corrected and carried forward if the original return was timely, and refund claims can be adjusted subject to scrutiny. Belated Returns: Flexibility With Strings Attached A belated return under Section 139(4) applies when the original filing deadline is missed. Although the law permits late filing within the same assessment year, December 31 is the absolute final date to use this option. Late filers face penalties of up to Rs 5,000, with a reduced cap of Rs 1,000 for those earning under Rs 5 lakh. Interest is also levied on unpaid taxes, and certain choices, such as selecting a tax regime, may no longer be available. While refunds can still be claimed, processing delays are common, and the carry forward of most losses is typically disallowed. Updated Returns: A Long Window, Higher Cost The updated return, filed using Form ITR-U, significantly extends the correction timeline, up to 48 months after the assessment year ends. However, this convenience comes at a steep price. Additional tax ranges from 25 per cent to 70 per cent, depending on how late the update is filed, and only one updated return is permitted per year. “In case the someone fails to file revised return by December 31, 2025, from January 1, 2026, he has to mandatorily file an updated return and in certain situation it may attract penalty proceedings,” said Mehul Sheth, CA and Secretary of The Chamber of Tax Consultants in a Moneycontrol report. Updated returns cannot be used to claim refunds or create or carry forward losses, making them the most restrictive option. The Income Tax Department has repeatedly warned taxpayers not to view this route as a substitute for timely filing.
