Section 263, Income-tax Act 2025: Return of income

What changed when Section 139 became Section 263?

The address changed; the architecture got tidier. Everything you did under Section 139 of the 1961 Act, the original return, the belated return, the revised return and the updated return, now lives in one section of the Income-tax Act 2025: Section 263, titled "Return of income". Where the old law spread these across sub-sections 139(1), 139(4), 139(5) and 139(8A), the new Act keeps the same four ideas and renumbers them 263(1), 263(4), 263(5) and 263(6).

Two pieces that used to travel with Section 139 moved to their own addresses. The tax you pay when you file an updated return, once Section 140B, is now Section 267. The late-filing fee, once Section 234F, is now Section 428. The Act also speaks in "tax years" instead of the old pair of "previous year" and "assessment year", so there is one label to track: the return for income earned in the year to 31 March 2027 is the return for tax year 2026-27.

The 2025 Act as first passed kept the classic filing calendar. The Finance Act 2026 then reset two dates before the new Act went live: it gave non-audit businesses and professionals an extra month (a 31 August due date instead of 31 July), and it stretched the revised-return window from nine months to twelve. Both changes are built into the dates below.

Section numbers (263, 267 and 428) and the 2026 calendar reset are cross-checked against multiple published copies of the enacted Act and Finance Act 2026.†

Who has to file an income tax return?

Anyone whose income before deductions crosses the basic exemption limit must file, and so must several people whose income is nil. Start with the income test: on the new regime the basic exemption is ₹4,00,000; on the old regime it is ₹2,50,000 (₹3,00,000 at age 60, ₹5,00,000 at 80). Cross your limit, counting income before Chapter VIII deductions and the Section 156 rebate, and a return is compulsory even if the rebate later drops your tax to zero.

Some filers have no income test at all. A return is compulsory whatever their income or loss:

• Every company and every firm (LLPs included), even a dormant one with no activity in the year.
• Anyone who wants to carry a loss forward: business, speculation, F&O and capital losses survive only if the return is filed by the due date.
• Residents holding foreign assets, a foreign bank account, signing authority over one, or who are the beneficiary of foreign income. The income can be nil; the holding alone triggers the return.
• Universities, colleges, business trusts, investment funds and the other institutions the section lists.

The high-value triggers carry over from the seventh proviso to Section 139(1) and the connected rules; the thresholds shown are those in force.†

What are the due dates for tax year 2026-27?

Four dates, set by who you are and whether your accounts need an audit. For tax year 2026-27, meaning income earned in the year to 31 March 2027:

The 31 August slot is new: until the Finance Act 2026 reset the calendar, non-audit businesses and professionals filed by 31 July alongside salaried taxpayers.† A working partner of a firm that needs an audit follows the firm's 31 October date. Return-form numbers for the first 2025-Act filings are yet to be notified; the ITR form finder below tracks them.

What is a belated return, and how late can you file?

A belated return is one filed after your due date but by 31 December 2027, and Section 263(4) is the door that stays open. The belated window runs nine months from the end of the tax year, so for tax year 2026-27 the last date is 31 December 2027, unless your assessment is completed sooner. You can file a belated return whether you simply missed the deadline or did not realise you had to file. It is a full return, not a lesser one, but it carries three costs.

What a belated return costs you:

• A late-filing fee of up to ₹5,000 under Section 428 (₹1,000 if your total income is ₹5 lakh or less).
• Interest at 1% a month on any tax still unpaid, running from the due date until you file and pay.
• The loss of most carry-forward losses. Business, speculation, F&O and capital losses can be carried forward only from a return filed by the due date; a belated return forfeits them. House property loss and unabsorbed depreciation are the exceptions, and survive a belated filing.

One thing a belated return keeps is your refund: if tax was over-deducted, filing late still gets it back, though the interest the department owes you runs from the date you actually file rather than from April.

How do you fix a mistake with a revised return?

File a revised return under Section 263(5). It replaces the return you already filed, and for tax year 2026-27 you have until 31 March 2028 to do it. A revised return is for genuine errors and omissions: a missed bank interest, a deduction you forgot, a wrong figure. You can revise an original return or even a belated one, and you can revise more than once, each revision superseding the last.

The Finance Act 2026 stretched this window from nine to twelve months from the end of the tax year, so the last date moved from 31 December 2027 to 31 March 2028. The extra three months are not entirely free. A revised return filed after the nine-month mark (after 31 December 2027) carries a fee under Section 428(b). Revise inside the first nine months and there is no fee; the later window is for corrections you spot late, not a reason to delay.

The twelve-month revised-return window and the Section 428(b) fee for late revisions are the Finance Act 2026 position, cross-checked against published copies.†

Updated returns (ITR-U): correcting a filing up to 48 months later

An updated return, filed on Form ITR-U under Section 263(6), lets you declare income you left out up to 48 months after the tax year, long after the belated and revised windows have shut. This is the safety valve for income you should have reported and did not: a capital gain you forgot, freelance receipts you left off, a second job.

You can file it whether or not you filed an original return, and the window is generous: 48 months from the end of the financial year that follows the tax year. For tax year 2026-27 that runs to 31 March 2032. The Finance Act 2025 doubled this window from 24 to 48 months. The price rises the longer you wait. On top of the tax and interest on the extra income, Section 267 charges an additional income tax, and the rate steps up by the year:

An updated return only ever adds tax. You cannot use it to reduce income, claim or increase a refund, or report a loss, and you cannot file one once the department has opened an assessment or search action for that year. The 48-month window and the 25/50/60/70 steps come from the Finance Act 2025 amendment; the successor section numbers (263(6) for the return, 267 for the tax) are cross-checked against published copies.†

What are the penalties for filing late or not filing at all?

The headline cost is the Section 428 fee, but interest and lost benefits usually cost more.

• Late-filing fee (Section 428): ₹5,000, cut to ₹1,000 if your total income is ₹5 lakh or less. It applies the moment you cross the due date, even when your tax is zero after the rebate. Section 428 now also penalises a late tax-audit report and a missing international-transaction report.
• Interest on unpaid tax: 1% a month under the successor to Section 234A for filing late, plus the advance-tax interest of Sections 234B and 234C on tax you should have paid through the year.
• Forfeited loss carry-forward: file after the due date and business, F&O and capital losses can no longer be carried to future years.
• Delayed or lost refund: no return, no refund. A refund is only paid against a filed return, and a very late filing can put it out of reach.

Skipping the return entirely is worse. Beyond the fee and interest, the department can issue a notice requiring you to file, complete a best-judgement assessment, and in serious evasion cases begin prosecution. If you genuinely owe nothing and were not required to file, there is no fee: it attaches only where filing was compulsory.

Why filing still matters when your tax is zero

Filing does work that a zero tax bill hides. Four reasons to file even when nothing is payable:

• Refunds. If TDS was deducted on your salary, interest or a property sale and your final tax is lower, the only way to get the difference back is to file. Banks deduct 10% TDS on fixed-deposit interest whatever your slab; a return reconciles it.
• Carrying losses forward. A year with a capital or business loss is exactly when you want a timely return, so the loss can shelter a profitable year later.
• Proof of income. Loan underwriters, visa officers and tender processes routinely ask for two or three years of filed returns, and a gap is hard to backfill.
• Staying off the radar. When your PAN shows a large TDS credit, a big deposit or a property deal but no return, the missing return is what triggers a notice.

A practical filing plan for tax year 2026-27

Treat 31 July 2027 (or 31 August if you run a non-audit business) as the only date that matters, and work backwards from it.

Where the real money is won or lost:

• If you have any loss to carry forward, the due date is a hard wall. A ₹4 lakh F&O loss filed one day late is a ₹4 lakh shelter thrown away; at the 30% slab that is up to ₹1,24,800 of future tax handed back. File on time even when the return is otherwise painless.
• If you spot an omission, act inside the first nine months. Revise before 31 December 2027 and there is no fee; wait for the twelve-month window and the Section 428(b) fee starts.
• If you have already missed everything and owe tax, do not sit on it. An updated return at 25% (filed by 31 March 2029) costs less than half the 70% you pay if you wait until 2032, and the interest clock runs the whole time.
• If your income is below the exemption, check the high-value triggers before deciding not to file. ₹2 lakh of foreign travel or a ₹1 crore current account makes the return compulsory whatever your income.

The one habit that removes most of this risk is filing early, from your Form 26AS and AIS: it leaves room to revise cleanly before December if something surfaces, keeps every carry-forward alive, and gets any refund moving. The income tax calculator and the ITR form finder below tell you what you owe and which form to use before you start.

Worked examples

Section 263 FAQs

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