What is the fee for filing revised ITR by March 31 as announced in Budget 2026?

A much-awaited demand of taxpayers falling in two jurisdictions have been met by the finance minister Nirmala Sitharaman. Budget 2026 has proposed to extend the deadline for filing revised ITR by three months. However, this can be done by paying a nominal fee.

Fee on revised ITR filing after December 31

Taxpayers can now file revised income tax returns until March 31 for a fee. This extension offers more time to correct errors in their ITR. A new section 234I has been inserted under Income Tax Act, 1961. The new section proposes a fee of Rs 5,000 (where taxable income is more than Rs 5 lakhs) and Rs 1000 (where taxable income is up to Rs 5 ,00,000). The compliance can be done on or before March 31 from the end of the relevant tax year.


Who will benefit from this extension?

Even though the December 31 deadline did not coincide with international tax deadlines, the Finance Minister's suggested modification albeit with a small fee is anticipated to benefit taxpayers taxable in multiple tax jursidictions.

The revised ITR deadline with a fee of Rs 5000 allows individual to correct their tax return information even after December 31 i,e until 31 March of the following year.

Shalini Jain, Tax Partner, EY India, says, "Under the existing provisions of the Income‑tax Act, 1961, both belated and revised tax return must be filed on or before 31 December following the end of the relevant tax year. As a result, once a belated tax return is filed, it cannot be revised post 31 December. To address this limitation, the deadline for filing the revised tax return has now been extended to 31 March of succeeding tax year. This extension provides taxpayers with an additional three‑month window to revise a belated return (filed post 31 July but on or before 31 December) or update the original tax return filed on or before 31 July post closure of the relevant tax year. For taxpayers earning income across multiple tax jurisdictions particularly where foreign countries follow tax years that do not align with the Indian fiscal year, the revised deadline offers meaningful relief. In order to claim relief from double taxation, there is a dependency on availability of proof of payment of foreign taxes and foreign tax returns which is usually available post 31 December, the extended deadline for filing a revised tax return provides critical procedural relief in such cases. This extension may enable such taxpayers to incorporate such foreign income and taxes information in a timely manner, ensuring accuracy in reporting and compliance with statutory obligations."

She futher explains this with an example. "Consider an individual who qualifies as a Resident and Ordinarily Resident of India for the tax year 2025-26 and earns income in the USA during January to March 2026. This USA sourced income is taxable both in the USA and in India. To claim Foreign Tax Credit (FTC) in India, the taxpayer must furnish proof of taxes paid in the USA, which would be available only after the end of the USA tax year i.e., post 31 December 2026. Under the extended deadline, such a taxpayer may now file a revised tax return up to 31 March 2027. This additional window provides sufficient time to obtain the proof of payment of taxes in the USA along with supporting documentation, enabling the taxpayer to correctly claim the eligible FTC in the revised tax return by paying a nominal fee, as applicable."

When will new provisions come into effect?

The new provisions will take effect from 1st day of April 2026 for tax year 2026-27 and subsequent years. This means you can file revised ITR in March 2028 by paying fee of Rs 5,000 (taxable income upto Rs 5,00,000) to correct any errors in ITR filed for tax year 2026-27.

However, as a part of relief for current financial year 2025-26, the provisions are applicable from March 1, 2026 under the Income-tax Act, 1961 as well. This means that ITR to be filed for current FY 2025-26 can be revised until March 31, 2027.

What did Budget 2026 document say?

As per Budget 2026 documents, Section 263(5) allows a taxpayer to revise an original or belated return to rectify any omission or wrong statement, relating to income, deductions, exemptions, losses, or any other particulars. It is considered to increase the prescribed time limit for filing the revised return from existing 9 months to 12 months from the end of the relevant tax year. As presently, the timeline for revised and belated return coincides with each other which is nine months from the end of the relevant tax year. Hence, a person who is filing his belated return at the end was not having the opportunity to revise his return of income. The extension of time limit for filing revised return of income, will allow the taxpayers to file revised return where belated return is filed at the end.

In this regard, it is proposed to amend section 263(5) of the Act so as to increase the prescribed time limit for filing the revised return from its existing time limit of nine months to twelve months from the end of the relevant tax year.