Answer

1. F

   Facts

   From 1 March 2026, an updated return may reduce a loss, provided the original loss return was filed on time. This helps correct an overstated loss before it is carried forward.

2. P

   Provisions and law

   • Sec 139(8A), Income-tax Act 1961 (now Sec 263(6), Income-tax Act 2025)Updated return within 48 months from the end of the relevant assessment year, once per year, not to reduce tax or raise a refund.
   • Sec 72, Income-tax Act 1961 (now Sec 112, Income-tax Act 2025)Business loss carried forward against future business income.
   • Sec 80, Income-tax Act 1961 (now Sec 121, Income-tax Act 2025)Loss can be carried forward only from a return filed on time.
3. A

   Analysis

   Say your return showed a ₹5 lakh loss but the real loss was ₹3 lakh. An updated return can reduce the loss to ₹3 lakh. If you already set off the excess loss in later years, those years may now show tax payable and need updated returns too. Work out the chain before filing.

4. C

   Conclusion

   1. 1Compute the correct loss.
   2. 2Check which later years used the loss.
   3. 3File the updated return for the loss year.
   4. 4File updated returns for later years where tax increases.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.