Income Tax Return (ITR) Filing Deadline Extended for AY 2025-26
- aionbusinesscare
- May 30
- 3 min read
Major Update: ITR Filing Deadline Extended
The most significant recent news is the extension of the Income Tax Return (ITR) filing deadline for Assessment Year (AY) 2025-26 (Financial Year 2024-25) from July 31, 2025, to September 15, 2025.
Reason for Extension: The Central Board of Direct Taxes (CBDT) announced this extension due to several factors:
Significant revisions in ITR forms: The ITR forms (1 to 7) for AY 2025-26 have undergone structural and content changes to simplify compliance and enhance transparency. These include enhanced reporting requirements for deductions and TDS section codes, and a new bifurcation of capital gains for transfers before and after July 23, 2024 (due to Finance Act 2024 amendments).
System development and utility rollout: The revised forms necessitate additional time for the Income Tax Department to develop, integrate, and test the corresponding e-filing utilities.
TDS credit reflection: Credits from TDS statements, due for filing by May 31, 2025, are expected to reflect in taxpayers' Form 26AS and AIS/TIS only in early June, which would have left a limited window for accurate filing without the extension.
Other Notable Changes and Notifications (Effective from April 1, 2025, for FY 2025-26 unless specified):
New Tax Regime Default & Rebate Increase: The new tax regime under Section 115BAC is now the default regime. The rebate under Section 87A for those opting for the new tax regime has been increased from Rs. 25,000 to Rs. 60,000. This means individuals with taxable income up to Rs. 12 lakh (or Rs. 12.75 lakh with standard deduction for salaried) will have no tax liability under this regime.
Revised ITR Forms: All seven ITR forms for AY 2025-26 have been notified, incorporating amendments from the Finance Act 2024 and including simplifications. For instance, ITR-1 (Sahaj) now allows salaried individuals to report long-term capital gains (LTCG) up to Rs. 1.25 lakh, which was previously not permitted.
Enhanced TDS Thresholds: Threshold limits for Tax Deducted at Source (TDS) for various payments have been revised upwards to reduce compliance burden. For example:
Interest on deposits for senior citizens: Rs. 50,000 to Rs. 1,00,000.
Rent payments: Rs. 2.4 lakh to Rs. 6 lakh.
Changes to TCS (Tax Collected at Source):
The threshold for TCS on overseas remittances under LRS has increased from Rs. 7 lakh to Rs. 10 lakh.
No TCS will be applicable on remittances for education financed through educational loans.
Section 206C(1H), which mandated TCS on the sale of goods exceeding Rs. 50 lakh, has been removed.
Extension for Filing Updated Tax Returns: The time limit for filing updated income tax returns (ITRU) has been extended from two years to four years from the end of the relevant assessment year, encouraging disclosure of previously undisclosed incomes.
Omission of Sections 206AB and 206CCA: These sections, which prescribed higher TDS and TCS rates for non-filers of income tax returns, have been omitted to simplify compliance for deductors and collectors.
Relaxation of Deemed Let-Out Property Provision: Individuals can now treat two properties as self-occupied without any tax implication on notional rent, instead of just one.
ULIPs as Capital Gains: Unit Linked Insurance Plans (ULIPs) with annual premiums exceeding Rs. 2.5 lakh will now be taxed as capital gains upon maturity.
Removal of Equalisation Levy: The 6% equalisation levy on digital advertisements paid to non-resident e-commerce operators has been removed.
Benefits for IFSC: Tax incentives, including exemption from capital gains tax and concessional tax rates, have been introduced/extended for International Financial Services Centre (IFSC) units.
Tax Exemption for Start-ups: Eligible start-ups incorporated between April 1, 2023, and March 31, 2025, can avail of 100% tax exemption on profits for three consecutive assessment years out of ten years.
Comments