return to news
  1. Upstox
    /
  2. News
    /
  3. Personal Finance News
    /
  4. Tax
    /
  5. Why are thousands of taxpayers updating their returns with ITR-U in 2025? Find out if you should too

Personal Finance News

Why are thousands of taxpayers updating their returns with ITR-U in 2025? Find out if you should too

rajeev kumar
By Rajeev Kumar

2 min read | Updated on July 15, 2025, 13:15 IST

Twitter Page
Linkedin Page
Whatsapp Page

SUMMARY

ITR-U provides taxpayers with an opportunity to revise their past ITR mistakes. It can be filed to report any omission in your previous tax returns.

Updated ITR-U surge

A large number of taxpayers are updating their past returns. | Image source: Shutterstock

Thousands of taxpayers have filed updated Income Tax Returns (ITR-U) in 2025. According to the Income Tax Department, approximately 40,000 taxpayers have filed updated returns in the last four months alone. Wondering what's behind this?

Well, these taxpayers had made false claims, and the tax department allowed them to come out clean. As a result, these 40,000 taxpayers gave up their combined claims worth over ₹1000 crore. (Know about the rampantly misused income tax deductions here).
"..approximately 40,000 taxpayers have updated their returns in the last four months, voluntarily withdrawing false claims amounting to ₹1,045 crore," the Income Tax Department said in a statement on Monday (July 14, 2025).
ITR-U provides taxpayers with an opportunity to revise their past ITR mistakes. It can be filed to report any omission in your previous tax returns. The Finance Act 2025 has allowed taxpayers to file ITR-U for up to 4 years (Check details about the latest ITR-U form here).

Should you also file ITR-U?

No, if you haven't hidden any income from the income tax department or made any false tax refund claims in the past.

However, if you have made any false claims in the ITR or hidden any income source, then you must correct your mistake by filing ITR-U. Not doing so can lead to stern action from the Income Tax Department, including penalties and prosecution wherever applicable.

More so because the Income Tax Department is now not only coming after the taxpayers who have made false claims in the past, but also the masterminds, mostly tax preparers, who influenced them to make false claims and earned commissions.

"However, many remain non-compliant, possibly under the influence of the masterminds behind these evasion rackets," the tax department said.

The tax department has recently raided multiple locations across the country, targeting individuals and entities facilitating fraudulent claims of deductions and exemptions in Income Tax Returns (ITRs).

The tax raids have implicated many salaried employees of MNCs, PSUs, government bodies, academic institutions, and entrepreneurs.

ELSS
Find the best tax-saver funds for 2025.
promotion image

About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.