Quick Summary
The Government has proposed an amendment to Section 263 of the Income Tax Act, 2025, to expand the scope for filing updated returns of income. Currently, Section 263(6) allows taxpayers to file an updated return within 48 months from the end of the financial year following the relevant tax year, subject to certain restrictions. Updated returns cannot generally be filed to declare a loss, reduce tax liability, or increase a refund, and are not allowed if assessment, reassessment, search, survey,
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FAQ :
Taxpayers will now be able to file an updated return to reduce the amount of loss they have claimed, even if it doesn't result in taxable income.
The amendments will come into force from 1st April 2026 for the Income-tax Act, 2025, and from 1st March 2026 for the Income-tax Act, 1961.
No, updated returns cannot be used to declare a loss. This amendment specifically allows for the reduction of an already claimed loss.
Previously, updated returns could not be filed to declare a loss, reduce tax liability, or increase a refund, and were not allowed if certain proceedings were ongoing or completed.
The change addresses stakeholder suggestions to provide greater flexibility in correcting previously filed loss returns and aims to simplify compliance.
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