The Central Board of Direct Taxes (CBDT), the apex body overseeing direct tax administration in India, has announced a significant extension to the Income Tax Return (ITR) filing deadline for the Financial Year 2024-25 (Assessment Year 2025-26). Originally set for July 31, 2025, the deadline has now been extended to September 15, 2025, providing taxpayers an additional 46 days to file their returns. This move, aimed at easing compliance burdens, comes in response to substantial revisions in ITR forms and ongoing updates to the e-filing infrastructure. Below, we delve into the details of this extension, its implications, and key considerations for taxpayers.
Extended ITR Filing Deadline 2025: New Deadline, ITR Forms & Tax Updates
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Why the Extension?
The decision to extend the ITR filing deadline stems from several practical challenges faced by taxpayers and tax professionals alike. The CBDT, in its circular dated early July 2025, highlighted the following reasons:
Revised ITR Forms: For AY 2025-26, all seven ITR forms (ITR-1 to ITR-7) have undergone significant modifications to align with recent tax policy changes, including the new Direct Tax Code (DTC) introduced in Budget 2025. Notably, ITR-1 (Sahaj) and ITR-4 (Sugam) now allow salaried individuals and those under the presumptive taxation scheme to report long-term capital gains (LTCG) up to ₹1.25 lakh, a change that required taxpayers to adapt to new reporting formats.
Delayed E-Filing Utilities: The e-filing utilities for ITR-2 and ITR-3, used by individuals and Hindu Undivided Families (HUFs) with complex income sources, have faced delays due to extensive updates. These forms now require detailed reporting of capital gains before and after July 23, 2024, as well as enhanced disclosures for deductions and exemptions. The CBDT acknowledged that these changes necessitated additional time for taxpayers to comply accurately.
System Upgrades: The Income Tax Department’s e-filing portal has been undergoing technical enhancements to support the new forms and ensure seamless processing. These upgrades, while aimed at improving user experience, have temporarily slowed down the filing process, prompting the extension to avoid penalizing taxpayers for systemic delays.
Stakeholder Feedback: Representations from tax professionals, chartered accountants, and industry bodies like the Institute of Chartered Accountants of India (ICAI) emphasized the need for more time to ensure error-free filings, especially given the complexity of the revised forms and the increased scrutiny on compliance.
Who Benefits from the Extension?
The extended deadline applies to taxpayers who are not required to get their accounts audited under the Income Tax Act, 1961. This includes:
Salaried Individuals: Those filing under ITR-1 (Sahaj) or ITR-4 (Sugam), typically covering salaried employees, small business owners, and professionals opting for presumptive taxation.
Individuals with Capital Gains: Taxpayers reporting capital gains, particularly LTCG up to ₹1.25 lakh, now included in ITR-1 and ITR-4.
Non-Resident Indians (NRIs): NRIs with income taxable in India, filing under ITR-2 or ITR-3, benefit from the additional time to comply with complex reporting requirements.
Small Businesses and Professionals: Those under the presumptive taxation scheme (Sections 44AD, 44ADA, or 44AE) who use ITR-4.
However, taxpayers subject to audit requirements (e.g., businesses with turnover exceeding ₹10 crore or professionals with gross receipts above ₹50 lakh) must adhere to the original audit deadlines, typically October 31, 2025, unless separately extended.
Key Changes in ITR Forms for AY 2025-26
The revised ITR forms for AY 2025-26 reflect the government’s push for transparency and alignment with the new DTC framework. Key updates include:
- Capital Gains Reporting: Taxpayers must now report capital gains transactions in two parts—before and after July 23, 2024—due to changes in tax rates and exemptions announced in Budget 2025. For instance, the LTCG tax rate on certain assets was revised, necessitating bifurcated reporting.
- Deduction and Exemption Disclosures: Enhanced schedules in ITR-2 and ITR-3 require detailed breakdowns of deductions under sections like 80C (investments in PPF, ELSS, etc.), 80D (health insurance premiums), and 80G (donations). This aims to curb false claims, which are under increased scrutiny this year.
- Aadhaar OTP Verification: From July 1, 2025, updating details on the e-filing portal mandates Aadhaar OTP verification, enhancing security and ensuring accurate taxpayer identification.
- Presumptive Taxation Adjustments: ITR-4 now accommodates professionals and businesses under the presumptive taxation scheme with higher turnover thresholds, reflecting Budget 2025’s push to simplify taxation for small enterprises.
Implications for Taxpayers
The extension offers significant relief but comes with responsibilities and considerations:
Avoid Last-Minute Rush: The additional 46 days provide ample time to gather documents, verify details, and file accurate returns, reducing errors that could trigger notices or scrutiny. As of July 7, 2025, over 75 lakh ITRs have been filed, with 71 lakh verified, indicating a steady filing pace.
Increased Scrutiny: The CBDT has flagged approximately 1.65 lakh cases for mandatory scrutiny in FY 2025-26, targeting high-risk transactions, discrepancies from past assessments, and inputs from law enforcement agencies. Taxpayers should ensure accurate reporting to avoid audits.
Withholding of Refunds: Refunds for AY 2025-26 are being withheld until past returns and pending assessments are cleared, a measure to curb fraudulent refund claims. Taxpayers with outstanding demands or unfiled prior-year returns should resolve these promptly.
Leveraging Deductions: Those opting for the old tax regime can maximize deductions under sections 80C (up to ₹1.5 lakh), 80D (up to ₹25,000/50,000 for self/senior citizens), 80TTA (up to ₹10,000 on savings interest), and 80TTB (up to ₹50,000 for senior citizens). Proper documentation is critical to claim these benefits.
Practical Tips for Taxpayers
To make the most of the extended deadline, taxpayers should:
Start Early: Use the extra time to collect documents like Form 16, bank statements, investment proofs, and capital gains statements. Cross-check details to avoid discrepancies.
Verify Aadhaar Linkage: Ensure your Aadhaar is linked to your PAN and updated on the e-filing portal, as OTP verification is now mandatory.
Consult Professionals: Given the complexity of revised forms, especially for ITR-2 and ITR-3, consulting a chartered accountant can help navigate new reporting requirements.
Resolve Past Issues: Address any pending notices or unfiled returns to ensure smooth refund processing.
Use the E-Filing Portal: Regularly check the Income Tax Department’s e-filing portal (incometaxindia.gov.in) for updates on ITR-2 and ITR-3 utilities, expected to be released soon.
Tax Administration Reforms
The extension aligns with the government’s broader agenda to simplify tax compliance and enhance transparency. The introduction of the Direct Tax Code in Budget 2025 aims to streamline income tax, corporate tax, and capital gains tax frameworks, making them more taxpayer-friendly. Additionally, the CBDT’s use of advanced data analytics to identify high-risk cases reflects a shift toward technology-driven tax administration. However, challenges like delayed utilities and refund withholdings underscore the need for robust infrastructure to support these reforms.
Conclusion
The extension of the ITR filing deadline to September 15, 2025, is a welcome relief for millions of taxpayers navigating the complexities of revised forms and systemic upgrades. While it offers breathing room, taxpayers must act proactively to ensure accurate and timely filings, especially given the heightened scrutiny on compliance. By leveraging the old regime’s deductions, verifying details, and staying updated on e-filing utilities, taxpayers can make the most of this opportunity. For further guidance, visit the Income Tax Department’s portal or consult a tax professional to ensure a hassle-free filing experience.