In a significant move offering relief to millions of taxpayers, the Central Board of Direct Taxes (CBDT) has extended the deadline for filing Income Tax Returns (ITRs) for the Assessment Year 2025-26. Previously due by July 31, 2025, individuals and businesses now have until September 15, 2025, to submit their returns.
The decision to extend the deadline comes after several key developments. The CBDT explained that the ITR forms for AY 2025-26 have undergone notable changes, both in structure and content. These revisions are aimed at making tax compliance simpler, increasing transparency, and ensuring accurate reporting of income and taxes.
However, these changes require time for the Income Tax Department's systems to be updated, integrated, and thoroughly tested. This ensures that the new forms work smoothly when taxpayers file their returns.
Another crucial reason for the extension is the timing of Tax Deducted at Source (TDS) credits. Statements for TDS are due by May 31, 2025. The credits from these statements are expected to appear in taxpayers' accounts only by early June. Without the extension, this would have left a very short window for taxpayers to accurately reflect their TDS credits and file their returns.
The Income Tax Department has already released all seven ITR forms for AY 2025-26, incorporating these updates and simplifications.
ITR-1 (Sahaj): This form is for resident individuals with income up to Rs 50 lakh from salary, one house property, and other sources. A major update now allows salaried individuals to report long-term capital gains (LTCG) up to Rs 1.25 lakh, which was not permitted before.
ITR-2: For individuals and Hindu Undivided Families (HUFs) with capital gains but no business income. It now requires reporting capital gains separately based on whether they arose before or after July 23, 2024, due to changes in LTCG tax rules introduced in the 2024 Union Budget.
ITR-3: For individuals and HUFs with income from business or profession. The reporting limit under Schedule AL (Assets and Liabilities) has been increased from Rs 50 lakh to Rs 1 crore, easing compliance for many.
ITR-4 (Sugam): Designed for individuals, HUFs, and firms (excluding LLPs) opting for presumptive taxation. Similar to ITR-1, it now allows reporting of LTCG up to Rs 1.25 lakh, helping small taxpayers.
ITR-5 and ITR-6: These forms are for firms, LLPs, associations, cooperative societies, and companies. They also include adjustments to the capital gains schedule to align with the revised tax rules from July 2024.
ITR-7: This form is for trusts and charitable institutions.
Read more on: ITR Filing 2025: Why You Should Wait Till June 15, 2025
This extension is a welcome relief, providing taxpayers with ample time to understand the new ITR forms, gather all necessary documents, and ensure accurate reflection of their income and deductions. It also allows the Income Tax Department to finalize its systems, promising a smoother and more accurate filing experience for everyone. A formal notification from the CBDT is expected soon.
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Published on: May 27, 2025, 5:48 PM IST
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