Missed the ITR Deadline? Belated Return, Updated Return (ITR-U) and What You Lose — FY 2025-26

Missing the due date is common, and it is fixable. What you lose depends on how late you are and what your return contains. A salaried taxpayer with a refund loses very little by filing a few weeks late. An F&O trader with a loss can lose a great deal.

This guide covers FY 2025-26 (AY 2026-27), where the due dates were 31 July 2026 for most individuals and 31 October 2026 where a tax audit applies.

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Your three routes, by date

If you are filing…	Route	Section (1961 Act)
After the due date, by 31 December 2026	Belated return	139(4)
After 31 December 2026, up to 31 March 2031	Updated return (ITR-U)	139(8A)
A loss or refund claim that only a timely return could carry	Condonation of delay — an application to the department	119(2)(b)

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Route 1: the belated return (until 31 December 2026)

A belated return is a normal return filed late. It is processed like any other. The costs:

Cost	Detail
Late fee (234F)	₹5,000; ₹1,000 if total income is ₹5 lakh or less. Nil if your income is below the basic exemption limit and you were not otherwise required to file
Interest (234A)	1% a month on tax still unpaid, from the due date
Losses	Business losses (including F&O), capital losses and speculation losses of the year cannot be carried forward. House property loss and unabsorbed depreciation still can
The old regime	If you have no business income, the old tax regime can only be chosen in a return filed by the due date. A belated return is taxed under the new regime
Certain deductions	Deductions that require a timely return — such as those for specified undertakings — are lost

The regime point catches many people. A salaried taxpayer with large old-regime deductions — home loan interest, 80C, HRA — who files late is taxed under the new regime, with those deductions gone. With the FY 2025-26 new-regime slabs and the rebate up to ₹12 lakh, that is often not a loss. But for some it is the largest cost of filing late. Our new vs old regime guide shows where the line falls.

A belated return can also be revised, and a refund due on it is paid as usual.

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Route 2: the updated return — ITR-U (up to 31 March 2031)

After 31 December 2026, the only way to file for FY 2025-26 on your own initiative is an updated return under Section 139(8A). It is available for 48 months from the end of the assessment year — for AY 2026-27, until 31 March 2031 — whether or not you filed earlier.

It costs additional tax, on top of the tax and interest:

Filed within	Additional tax (of tax + interest)	For AY 2026-27
12 months from end of AY	25%	By 31 March 2028
12–24 months	50%	By 31 March 2029
24–36 months	60%	By 31 March 2030
36–48 months	70%	By 31 March 2031

The tax, interest and additional tax must be paid before filing.

What an updated return cannot do:

• Declare a loss, or increase a loss already declared
• Reduce the tax on an earlier return, or create or increase a refund
• Be filed where a search, survey, or assessment or reassessment is pending or completed for that year, or where the department already holds and has communicated information about you for that year
• Be filed twice for the same year

So ITR-U is for paying more tax voluntarily — usually to correct an omission before the department finds it, at a far lower cost than the penalty for under-reporting. It is not a way to recover a refund or a loss.

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Route 3: rescuing a lost refund or loss — condonation of delay

If what you lost by filing late is a refund or the carry-forward of a loss, the Act gives the department power to condone the delay under Section 119(2)(b), for genuine hardship.

CBDT Circular 11/2024 (applying to applications from 1 October 2024) sets the framework:

• The application must be made within five years from the end of the assessment year
• It is decided by the Principal Commissioner or Commissioner for claims up to ₹1 crore for the year, and by higher authorities above that
• It should be decided within six months from the end of the month in which it is received
• You must show reasonable cause for the delay — illness, a death in the family, a filing that failed on the portal, an error by an intermediary — with evidence
• No interest is paid on a refund allowed this way

Condonation is discretionary, and the department does refuse. But courts have repeatedly said that short, bona fide delays should ordinarily be condoned. For an F&O trader who filed a few days late and lost a large loss, the application is usually worth making.

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Which route, for which taxpayer

Your situation	Best route
Salaried, refund due, missed 31 July	Belated return by 31 December — check the regime cost first
Tax payable, missed the due date	Belated return now — interest runs at 1% a month until you pay
F&O or business loss, missed the due date	Belated return (to record the loss) plus a 119(2)(b) application to carry it forward
Income omitted from a return already filed, before 31 December	Revised return — revision for FY 2025-26 is open until 31 March 2027
Income omitted, and it is after 31 March 2027	Updated return, as early as possible — the additional tax rises each year
Notice already received for the year	Do not file ITR-U without advice — see our notice reply practice

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For F&O traders specifically

The loss is what matters. A belated return still lets you set off this year’s F&O loss against other income of the same year (except salary). What it loses is the carry-forward. An updated return cannot restore it. A 119(2)(b) condonation can. If the return is not yet filed, file it now, then apply. Our ITR for F&O traders guide and ITR-3 how-to cover the return itself.

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Frequently Asked Questions

What is the last date to file a belated return for FY 2025-26?

31 December 2026 (or before the assessment is completed, if earlier). After that, the only route is an updated return under Section 139(8A), with additional tax.

What is the penalty for filing ITR after the due date?

A late fee under Section 234F of ₹5,000, or ₹1,000 if total income does not exceed ₹5 lakh, plus interest under Section 234A at 1% a month on unpaid tax. Business and capital losses of the year cannot be carried forward, and a taxpayer without business income is taxed under the new regime.

Can I choose the old tax regime in a belated return?

Not if you have no business income. The option to stay in the old regime has to be exercised in a return filed by the due date, so a belated return is taxed under the new regime. Taxpayers with business income opt out through Form 10-IEA, which also has to be filed by the due date.

Can an updated return (ITR-U) be used to claim a refund or a loss?

No. An updated return cannot declare or increase a loss, reduce tax, or create or increase a refund. It is for paying additional tax on income that was omitted. A lost refund or loss carry-forward can sometimes be recovered by applying for condonation of delay under Section 119(2)(b).

How much does an updated return cost?

The tax and interest due, plus additional tax of 25% of that amount if filed within 12 months from the end of the assessment year, 50% within 24 months, 60% within 36 months, and 70% within 48 months.

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Related reading

• ITR Filing FY 2025-26: The Complete Guide
• New vs Old Tax Regime FY 2025-26
• ITR for F&O Traders: Turnover, Tax Audit and ITR-3
• How to Fill ITR-3 for F&O Traders
• Income-tax Notice Reply Services