Deadline extended, new form notified: Why filing income tax returns will be different this year

Filing income tax returns (ITRs) for the assessment year 2025-26 will be a bit different this time.

The Central Board of Direct Taxes (CBDT) has issued all seven ITR forms. These now include some changes in how people report capital gains.

On Tuesday, the CBDT also pushed the deadline to file ITRs . The last date has been moved from July 31 to September 15, 2025.

So, what’s new this year? We explain everything you need to know in this explainer.

Let’s take a look:

Deadline extended for filing ITRs

The last date to file income tax returns for the assessment year 2025-26 has been shifted. It was earlier set for July 31, 2025, but now the new deadline is September 15, 2025.

As per the Central Board of Direct Taxes, this move aims to address concerns raised by stakeholders. It also gives more time for taxpayers to meet the requirements properly, helping to keep the process accurate and in order.

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Kind Attention Taxpayers!

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

This extension will provide more time due to significant revisions in ITR forms, system development needs, and TDS credit… pic.twitter.com/MggvjvEiOP

— Income Tax India (@IncomeTaxIndia) May 27, 2025

In its press note, the CBDT shared that the ITR forms for AY 2025-26 have been revised. These changes were made to make filing easier, bring more clarity, and allow for better reporting of information.

Because of the updates, more time was needed to develop and test the systems that support these forms, the CBDT said.

It added that the deadline was extended to September 15 to allow time for system upgrades and the launch of the ITR filing tools for AY 2025-26.

Even though all the forms are now available, taxpayers still cannot file their returns. This is because the e-filing tools, the software used to submit the forms on the tax website, are not ready yet.

So, while the forms can be downloaded, online filing will have to wait until the tools are working.

New form ‘ITR-U’ launched

The ITR forms from ITR-1 to ITR-7, along with the ITR-V form, have all been released.

This year, a new form has also been notified- ITR-U (Income Tax Updated Return). Introduced on May 19, it lets taxpayers file or revise returns for up to 48 months, under the latest Finance Act.

This means returns can now be updated for the assessment years 2021-22, 2022-23, 2023-24, and 2024-25.

The Finance Act, 2025, has increased the time limit from the earlier 24 months.

The government has also changed Section 139(8A) of the Income Tax Act.

As per the new rules, ITR-U cannot be filed if a show-cause notice under Section 148A is issued more than 36 months after the end of the relevant assessment year. However, if the assessing officer decides under Section 148A(3) that reassessment is not needed, then ITR-U can still be filed within 48 months.

Some rules still apply. Taxpayers cannot use ITR-U to claim refunds or to carry forward losses. They also cannot reduce the income that was reported in an earlier return.

New rules for reporting capital gains

The exemption limit for long-term capital gains (LTCG) on listed shares and equity mutual funds has been raised from Rs 1 lakh to Rs 1.25 lakh. This move is meant to support small investors.

Taxpayers who have LTCG up to Rs 1.25 lakh and no capital loss to carry forward can now use the simpler ITR-1 or ITR-4 forms.

Earlier, they had to fill out ITR-2 or ITR-3, even if they did not owe any tax.

The revised ITR-1 and ITR-4 forms now have dedicated fields to report exempt LTCG under Section 112A. This change is expected to ease the process for salaried individuals and small business owners.

However, if you have short-term capital gains or any capital losses that you want to carry forward, you will still need to use one of the other ITR forms.

As the Budget 2024 introduced new tax rates for capital gains, the Capital Gains Schedule has been updated. Now, gains must be reported separately for periods before and from July 23, 2024, so the correct tax rates can be applied.

Tax on buyback of shares

From October 1, 2024, companies will no longer pay tax on buying back their shares.

Instead, investors must report the amount received as a deemed dividend under “Other Income” in their ITR. Any capital loss linked to the buyback must be shown separately.

ITR-5 and ITR-6 have been updated to reflect this change. ITR-5 now allows only genuine buyback losses, provided the dividend has been taxed.

ITR-6, which is for companies, now includes new sections for reporting capital gains, income from cruise operations, and diamond-related profits.

Reporting payments to MSMEs

If you earn income from a business or profession, you now need to mention how many days it took to make payments to Micro, Small, and Medium Enterprises (MSMEs).

Asset and liability reporting

The limit for reporting assets and liabilities under the AL Schedule has been raised from Rs 5 million to Rs 10 million.

Although this offers some relief, it is still a good idea to keep detailed records of your assets, debts, and any changes during the year. This helps you stay organised and manage your finances better.

Why salaried taxpayers should avoid filing ITRs before June 15

Tax professionals suggest that salaried individuals should wait until June 15, 2025, to file their income tax returns, even though the forms are already available.

In previous years, the forms were released well ahead of time. This year, they were notified only by the end of April 2025. Also, the income tax department has not yet released the tools needed to file returns online.

Form 16 is another key reason for the delay. It is issued by your employer and shows your salary details and tax deductions. It also lists your total income, exemptions under sections like 80C and 80D, and any other deductions.

Employers issue Form 16 by June 15 every year. That’s why salaried taxpayers are advised to wait until then before filing their returns.