As the December 31st deadline approached, taxpayers actively engaged with the Income Tax Return (ITR) filing process for Assessment Year 2026. According to recent data, a substantial number of taxpayers utilized the options available to them to revise or update their previously filed returns.

Specifically, until December 31st, 2.24 million updated returns were filed, alongside 2.6 million revised returns. These figures highlight the importance of these provisions for taxpayers seeking to rectify errors or make adjustments to their initially submitted income tax declarations.

The Income Tax Department had previously urged taxpayers to carefully review their ITRs, ensuring the accuracy of claimed deductions and exemptions. The ability to file a revised return under Section 139(5) allows taxpayers to correct mistakes made in the original return. This option remains available until December 31st of the assessment year.

Following the December 31st deadline, taxpayers are no longer able to file revised ITRs for AY26. However, they retain the option to file an updated return under Section 139(8A) of the Income-tax Act, 1961, for up to four years from the end of the relevant assessment year. It's important to note that filing an updated return may involve higher taxes and interest payments, and it cannot be used to claim a refund or reduce tax liability.

The purpose of the updated return is to encourage voluntary tax compliance. It provides taxpayers with an opportunity to correct errors or omissions in their original filings, even if they have already filed an original, belated, or revised return.

The Income Tax Department has a longer timeframe to process ITRs, with the Centralized Processing Center (CPC) having until December 31, 2026, to process returns filed for AY26. As of late December 2025, reports indicated that a significant number of ITRs were still awaiting processing.

It is crucial for taxpayers to be aware of the deadlines and provisions related to ITR filing to ensure compliance and avoid potential penalties or interest charges. While the option to file a revised return for AY26 has now passed, the availability of updated returns provides a continued avenue for taxpayers to rectify any discrepancies in their filings, albeit with different implications.