The Central Board of Direct Taxes (CBDT) on May 27 extended last file of filing income tax returns (ITRs) for assessment year (AY) 2025-26 to September 15, 2025 from July 31, 2025. The extension implies that salaried individuals will get an additional 46 days to file returns.

"CBDT has decided to extend the due date of filing of ITRs, which are due for filing by 31st July 2025, to 15th September 2025," said the the apex direct tax body in a post on X platform.

"This extension will provide more time due to significant revisions in ITR forms, system development needs, and TDS credit reflections. This ensures a smoother and more accurate filing experience for everyone. Formal notification will follow," added CBDT.

The notified ITRs for AY 2025-26 have undergone structural and content revisions aimed at simplifying compliance, enhancing transparency, and enabling accurate reporting. These changes have necessitated additional time for system development, integration, and testing of the corresponding utilities. Furthermore, credits arising from TDS statements, due for filing by 31st May 2025, are expected to begin reflecting in early June, limiting the effective window for return filing in the absence of such extension, said CBDT in a statement.

"In view of the extensive changes introduced in the notified ITRs and considering the time required for system readiness and rollout of ITR utilities for Assessment Year (AY) 2025-26, CBDT has decided to extend the due date for filing returns. Accordingly, to facilitate a smooth and convenient filing experience for taxpayers, it has been decided that the due date for filing of ITRs, originally due on 31st July 2025, is extended to 15th September 2025.

"A formal notification to this effect is being issued separately. This extension is expected to mitigate the concerns raised by stakeholders and provide adequate time for compliance, thereby ensuring the integrity and accuracy of the return filing process," added CBDT.

The income tax department had recently notified all seven income tax return forms for assessment year 2025-26.

While ITR forms 1 and 4, which are filed by small and medium taxpayers, were notified on April 29; ITR-7, filed by trusts and charitable institutions, was notified on May 11.

One important change has been introduced in ITR-1 and 4, which was notified on April 29, relating to the reporting of capital gain income from listed equities.

Now, salaried individuals and those under the presumptive taxation scheme, having long-term capital gains (LTCG) of up to Rs 1.25 lakh in a financial year, will be able to file ITR-1 and ITR-4, respectively. Earlier, such persons/entities were required to file ITR-2.

Under the I-T law, LTCG of up to Rs 1.25 lakh from sale of listed shares and mutual funds is exempt from tax. Gains exceeding Rs 1.25 lakh/ annum are subject to 12.5% tax.

One change which has been introduced in ITR forms 2, 3, 5, 6 and 7 pertains to rationalisation of capital gains tax. In Schedule Capital Gains of the ITR, capital gains must now be split based on whether they arose before or after July 23, 2024.

In the Budget presented on July 24, 2024, the government had proposed to lower long-term capital gains tax on real estate to 12.5% without indexation benefit, from 20% with indexation.

Indexation benefit allows taxpayers to arrive at the cost price of the property after adjusting for inflation.

With this, individuals or HUFs who purchased houses before July 23, 2024, can opt to pay Long Term Capital Gain (LTCG) tax under the new scheme at the rate of 12.5% without indexation or claim the indexation benefit and pay 20% tax.

Also, in ITR-3, which is filed by individuals and HUFs having income from profits and gains of business or profession, the threshold for reporting assets and liabilities under ‘Schedule AL’ has been raised from Rs 50 lakh to Rs 1 crore, thus reducing the disclosure burden on middle-income taxpayers.

ITR Form 1 (Sahaj) and ITR Form 4 (Sugam) are simpler forms that cater to a large number of small and medium taxpayers.

Sahaj can be filed by a resident individual having annual income of up to Rs 50 lakh and who receives income from salary, one house property, other sources (interest) and agricultural income up to Rs 5,000 a year.

Sugam can be filed by individuals, Hindu Undivided Families (HUFs) and firms (other than Limited Liability Partnerships (LLPs)) having a total annual income of up to Rs 50 lakh and income from business and profession.

ITR-2 is filed by individuals and HUFs not having income from profits and gains in business or profession, but having income from capital gains.

ITR-5 is filed by firms and Limited Liability Partnership and Cooperative Societies. ITR-6 is filed by companies registered under the Companies Act.