Prepare Early, Stay Accurate, and File ITR Smoothly for FY 2025–26
Book Tax Experts Today
Section 263 of the Income Tax Act, 2025 explains the rules for filing Income Tax Returns (ITR). From 1 April 2026, all types of returns, including original, belated, revised, and updated returns (ITR-U), will be covered under this single section. At present, similar ITR filing rules are covered under Section 139 of the Income Tax Act, 1961.
The new Income Tax Act, 2025, will apply from Financial Year 2026-27 onwards. However, returns for Tax Year 2025-26 that are due in Jul 2026 will still follow the provisions of the Income Tax Act, 1961.
Section 263 of the Income Tax Act, 2025, lays down the rules for filing Income Tax Returns (ITR) in India. It explains:
Section 139 of the Income Tax Act 1961 has now been changed to Section 263 of the Income Tax Act 2025. Here is a comparison table of the old sections and their corresponding sections under the new Income Tax Act.
| Provision | Old Act (1961) | New Act (2025) |
|---|---|---|
| Return of Income | Section 139 | Section 263 |
| Electronic filing scheme | Section 139D | Section 263(2) |
| Senior citizen exemption from filing | Section 194P | Section 263(3) |
| Belated Return | Section 139(4) | Section 263(4) |
| Revised Return | Section 139(5) | Section 263(5) |
| Updated Return (ITR-U) | Section 139(8A) | Section 263(6) |
Section 263 describes the list of all types of persons who are required to file an income tax return.
Here is the category-wise list of all persons required to file ITR under section 263 -
Certain entities must file their Income Tax Return within the prescribed due date, irrespective of whether they earned any income or faced a loss during the financial year. These include:
Individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), and Bodies of Individuals (BOIs) must file an Income Tax Return if their taxable income exceeds the prescribed basic exemption limit after claiming eligible deductions and exemptions.
For the Financial Year 2025-26, the exemption limit under the new tax regime is ₹4 lakh, while under the old tax regime, it is ₹2.5 lakh. Different exemption limits are available for senior and super senior citizens under the old regime.
In the same way, certain specified entities, such as trusts and charitable institutions, are also required to file an ITR if their total income, calculated before claiming exemption under Section 11, exceeds the applicable exemption threshold.
In addition to the prescribed income limits, certain taxpayers are required to file an Income Tax Return under Section 263(1)(a) even in specific situations such as:
The due dates for ITR filing have changed under section 263 for the financial year 2025-26 -
Here are the due dates for FY 2025-26 -
| Category of Taxpayer | Due Date |
|---|---|
| Individuals required to file ITR-1 or ITR-2 | 31st July |
| Non-audit Businesses and professionals required to file ITR-3 and ITR-4 | 31st August |
| Partner of an audited firm or spouse (where transfer pricing is not applicable) | 31st October |
| Person (other than a company) whose accounts must be audited under any law | 31st October |
| Company (other than transfer pricing cases) | 31st October |
| Assessee required to furnish a Transfer Pricing report (Section 172) – including the firm/spouse | 30th November |
| Type of Return | When it Applies | Filing Deadline | Impact of Missing the Deadline |
|---|---|---|---|
| Original Return Section 263(1) | Filed within the standard due date prescribed under the Income Tax Act. | Must be filed by the applicable due date such as 31 July, 31 August, 31 October, or 30 November, depending on the taxpayer category. | Delay in filing may require submission of a belated return and can result in late fees, interest charges, and restrictions on carrying forward certain losses. |
| Belated Return Section 263(4) | Applicable when the taxpayer misses the original filing deadline. | Can be filed within 9 months from the end of the relevant financial year or before completion of assessment, whichever is earlier. For Financial Year 2026-27, the last date is 31 December 2027. | Late filing fee under Section 234F may apply. Certain losses cannot usually be carried forward, except house property loss and unabsorbed depreciation. Interest under Sections 234A, 234B, and 234C may also be levied. |
| Revised Return Section 263(5) | Used to correct mistakes or omissions in an already filed original or belated return. | Can be submitted within 12 months from the end of the relevant financial year, as proposed under the Finance Act 2026, or before assessment completion, whichever is earlier. | A late fee ranging from ₹1,000 to ₹5,000 may apply if revised after 9 months. The revised return replaces the original return. Failure to correct errors may lead to notices, additional tax demand, or incorrect reporting. |
| Updated Return (ITR-U) Section 263(6) | Filed voluntarily to disclose missed income or correct under-reporting, even if no original return was filed earlier. | Can be filed within 48 months from the end of the financial year following the relevant financial year. For Financial Year 2026-27, the deadline is 31 March 2032. | Additional tax under Section 267 ranging from 25% to 70% of tax and interest may apply depending on the delay period. ITR-U cannot be used to increase refunds or reduce earlier declared tax liability. Only one updated return is allowed per financial year. |
Under Section 263(7), an Income Tax Return may be considered defective if it does not meet the prescribed filing requirements. Some of the most common reasons include:
If the tax department identifies any defect in the return, the Assessing Officer informs the taxpayer and provides an opportunity to correct the error, generally within 15 days. In case the issue is not resolved within the allowed time, the return may be treated as invalid, as though it were never filed. This can lead to compliance issues, penalties, or loss of certain tax benefits. However, the Assessing Officer may still accept the return if the taxpayer submits a valid explanation for the delay or defect correction.
Yes. Section 263(3) authorizes the Central Government to exempt certain categories of taxpayers from filing an Income Tax Return, subject to the conditions mentioned in the official notification.
This provision forms the basis for relaxations available to specific taxpayers, including eligible senior citizens. For example, senior citizens earning only pension income and interest income from the same bank may not be required to file an ITR if the bank has already deducted the applicable TDS and all prescribed conditions are satisfied.
The Income Tax Act, 2025, continues to provide this relief mechanism through Section 263(3), allowing the government to notify such exemptions whenever required.
Section 263 of the Income Tax Act 2025 replaces sections 139, 139D, and section 194P of the Income Tax Act 1961.
For Financial Year 2025-26, salaried taxpayers and individuals having straightforward sources of income, such as those filing ITR-1 or ITR-2, are generally required to submit their Income Tax Return by 31 July. Also, for those filing ITR-3 or ITR-4, the due date will be 31st August 2026.
Finance Act 2026 has extended the ITR filing due date for non-audit businesses and professionals (ITR 3 and ITR 4) from 31 July to 31 August.
Yes. If you notice any mistakes, incorrect disclosure, or missed information in your original or belated Income Tax Return, you can correct it by filing a revised return. The revised return can be submitted within 12 months from the end of the relevant tax year or before the assessment is completed, whichever happens earlier.
However, if the revised return is filed after 9 months from the end of the relevant tax year, a late fee may also apply.
Section 263(3) empowers the Central Government to exempt certain categories of taxpayers from filing an ITR. One common example is eligible senior citizens who earn only pension and interest income from the same bank. If the bank has already deducted the required TDS and all prescribed conditions are fulfilled, such individuals may not be required to file a return.
An Income Tax Return may be treated as defective if it does not satisfy the prescribed filing requirements. This can happen due to reasons such as selecting the wrong ITR form, leaving mandatory schedules incomplete, or not attaching required financial statements. In such cases, the Assessing Officer issues a notice and usually provides 15 days to correct the defect. If the issue is not rectified within the specified time, the return may be treated as invalid, as though it were never filed.
Yes. Both Indian and foreign companies are compulsorily required to file an Income Tax Return under Section 263(1)(a), irrespective of whether they have earned any income or incurred losses during the year. Companies cannot claim exemption from filing based on income thresholds.
If you fail to file your return within the original due date, you may have to file a belated return under Section 263(4). In such cases, a late filing fee of up to ₹5,000 under Section 234F may apply. The fee is restricted to ₹1,000 if the total income does not exceed ₹5 lakh. Additionally, taxpayers may lose the benefit of carrying forward certain business or capital losses, and interest under Sections 234A, 234B, and 234C may also be charged.
Yes. Non-Resident Indians (NRIs) earning taxable income in India above the applicable exemption limit are required to file an Income Tax Return under Section 263. Further, resident taxpayers, except RNORs, who own foreign assets or hold signing authority in overseas accounts must also file a return, irrespective of their income level. NRIs should also review applicable DTAA provisions, if any, while determining their tax and filing obligations.
