India ITR Filing Extended & ITR‑3 Live for AY 2025‑26

Why the Extension? Understanding the “Sept 15 Deadline”

The decision to extend the “ITR extension 2025” was primarily driven by the extensive structural and content revisions introduced in the notified ITR forms for AY 2025-26. These changes, aimed at simplifying compliance and enhancing transparency, necessitated additional time for system development, integration, and testing of the corresponding utilities by the Income Tax Department.

Key reasons cited for the extension include:

• Structural Changes in ITR Forms: Amendments to the Income Tax Act in FY 2024-25, including changes in capital gains tax regimes and income tax slabs, required significant modifications to the ITR forms.
• System Readiness: The e-filing portal needed adequate time for system development and rollout of the updated ITR utilities.
• Delay in TDS Credit Reflection: Credits arising from TDS statements, due for filing by May 31, 2025, were expected to reflect in early June, limiting the effective window for return filing without an extension.

This extension is a welcome move for taxpayers, providing them with ample time to accurately prepare and submit their returns, thereby ensuring the integrity and accuracy of the filing process.

“ITR‑3 Live”: A Boost for Professionals and Traders

The Income Tax Department officially announced on July 30, 2025, that the “ITR‑3 live” form is now enabled for online filing for Assessment Year 2025-26. This is particularly beneficial for:

• Individuals and Hindu Undivided Families (HUFs) with income from business or professional activities.
• Those with income from share trading, including Futures & Options (F&O) and intraday trading.
• Company directors and investors in unlisted equity shares.
• Partners in firms.
• Individuals with capital gains or foreign income.

The updated ITR-3 form for AY 2025-26 includes several key changes:

• Mandatory selection for Form 10-IEA (new tax regime confirmation).
• Revised capital gains reporting, with split disclosures for gains pre- and post-July 23, 2024.
• Separate indexation disclosures for resident taxpayers.
• Higher reporting threshold for assets and liabilities (₹1 crore and above).
• Inclusion of Section 44BBC (applicable to cruise operations).
• Detailed reporting of dividend income and specific treatment of capital loss on share buybacks.

These updates aim to provide more granular disclosures and ensure accurate reporting, especially for complex income sources.

“ITR‑U Update” and Other Forms Now Available

Along with ITR-3, the Income Tax Department has also enabled the utilities for ITR-1 (Sahaj) and ITR-2 for AY 2025-26.

• ITR-1 (Sahaj): Applicable for resident individuals (other than not ordinarily resident) with total income up to ₹50 lakh from salary, one house property, other sources (interest, dividend, pension), and agricultural income up to ₹5,000. Notably, the new form allows individuals to file ITR-1 even if they have long-term capital gains up to ₹1.25 lakh from listed equity shares and/or equity mutual fund units.
• ITR-2: For individuals and HUFs not having income from profits and gains of business or profession. This form now includes options to report capital gains incurred on transactions before/after July 23, 2024, and to claim capital loss on share buybacks from October 1, 2024.
• ITR-U (Updated Return): While specific details on the ITR-U utility for AY 2025-26 were not immediately available, the general provision for filing updated returns (up to 2 years from the end of the relevant assessment year) remains crucial for taxpayers who need to correct errors or report omitted income after the original due date. The deadline for filing a belated or revised return for AY 2025-26 is December 31, 2025.

The Income Tax Department has also introduced new “Profession code update” in the ITR utilities for AY 2025-26 to better capture income from emerging activities. These include specific codes for:

• Commission Agents (09029)
• Social Media Influencers (16021)
• Speculative Trading (Intraday Equity) (21009)
• Futures & Options Trading (21010)
• Buying & Selling of Shares (Delivery-based Equity as business income) (21011)

Selecting the correct business code is vital to ensure accurate income reporting and avoid potential discrepancies or scrutiny.

“Tax Refund Speed”: What the Extension Means

While the extension provides more time for filing, it’s important to understand its potential impact on “Tax refund speed.” The Income Tax Department generally processes returns on a first-come, first-served basis. Filing your ITR early, even within the extended deadline, can lead to quicker processing of your refund.

Taxpayers who are eligible for a refund may also benefit from increased interest on their refund amount due to the extended deadline. Interest on tax refunds is calculated from April 1, 2025, until the date the refund is granted by the Income Tax Department, provided the ITR is filed within the due date. The extension effectively lengthens this period, potentially leading to a higher interest payout for taxpayers.

However, it’s crucial to file an accurate return to avoid delays. Any discrepancies, such as TDS mismatches or errors in reporting, can lead to notices and prolonged processing times for refunds.