NICAI Update
CA Raj Chawla
Quotes of the day:
1. Always do what you are Afraid to do in LIFE because To the Questions of life, You are the Answer & To the Problems of LIFE, You are the Solution.
2. If You JUDGE People Nobody Is Yours, If You UNDERSTAND People, Everyone Is Yours. Develop The HABIT Of UNDERSTANDING and You Will Experience PEACE And LOVE in All relations.
NICAI Update
1. After the presentation of Union Budget 2026, the government, through the Finance Bill, 2026, has clarified the provisions relating to the filing of Updated Income Tax Returns (ITR-U) under the Income-tax Act, 2025. The Income Tax Department has released a set of FAQs explaining the scope, timelines and additional tax payable in such cases.
2. Below are the key provisions explained, based strictly on the official FAQs issued after Budget 2026. What is an “Updated Return” under the Income-tax Act, 2025 Section 263(6) of the Income-tax Act, 2025 provides for furnishing of an updated return of income. An updated return is a return that may be furnished by a person, whether or not an original, revised, or belated return has been earlier furnished, to voluntarily disclose any income that was not reported or was inaccurately reported before, as long as certain conditions specified in the Income-tax Act, 2025 are met.
3. Finance ministry released a detailed set of FAQs through the Income Tax Department to clarify how several Budget proposals will work in practice. These clarifications are part of the Finance Bill, 2026 and assume special importance as India prepares to switch to the new Income-tax Act, 2025 from April 1, 2026.
4. While some of these changes might not have attracted immediate public attention, they will have a significant impact on how taxpayers file returns, disclose income, deal with penalties and prosecution, comply with TDS rules, and respond to tax notices in the upcoming financial year. 15 Budget 2026 tax changes that quietly matter to taxpayers Updated return window stretched to four years, but at a rising cost Taxpayers will now be able to file an updated return for up to 48 months, even if they did not file an original return earlier.
5. However, the longer one waits, the more expensive it becomes, with additional tax rising from 25% to 70%. This makes late voluntary disclosure possible—but costly.
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With best regards
CA (Dr) Raj Chawla
B.Com (Hons), FCA, FCS, FCMA, LLB
MIMA, DISA, MICA, Phd, ASA (Aust), CMP (USA)
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