ITR
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From 1 March 2026, the Finance Act 2026 allows an updated return in response to a Sec 148 notice within the time the notice allows. It costs a further 10% of tax and interest over the usual additional tax. Income offered this way is protected from the under-reporting penalty.
Sec 139(8A) (now Sec 263(6)); Sec 140B (now Sec 267); Sec 270A (now Sec 439); Sec 148 (now Sec 280)
Normally ITR-U is barred once reassessment is pending, but the amendment opens this route under a Sec 148 notice. The additional tax under Sec 140B(3A) becomes, for example, 35% instead of 25% of tax and interest in the first year; on ₹1,00,000 of tax and interest that is ₹35,000 extra. In return, Sec 270A(11A) keeps that income out of the penalty for under-reporting. Check with a CA that the year and notice fit the conditions before paying.
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