You can create updated setup as normal setup but remember some points which given below
1. Create new setup of upgraded application. 2. Open setup's properties (Select your setup name from solution explorer and press F4 key). 3. Set RemovePreviousVersion propertiesas True. 4. Change Version properties value. 5. Remove UpgradeCode's properties value and paste first setup's UpgradeCode properties. 6. Save and build your setup application.