Rationalising Due Dates for Filing Income Tax Returns: Key Highlights from Budget 2026
The Finance Bill 2026, introducing the new Income-tax Act, 2025, has ushered in a wave of structural reforms designed to simplify tax compliance. Among the most significant changes for individual taxpayers and businesses is the rationalisation of filing due dates, aimed at providing greater flexibility and reducing the “end-of-year” rush.
Here is a detailed breakdown of how Budget 2026 has reshaped the tax filing calendar.
1. Major Extension for Revised Returns
In a move that offers substantial relief to taxpayers who discover errors or omissions in their original filings, the deadline for Revised Returns has been significantly extended.
- New Deadline: Taxpayers can now file a revised return until March 31 of the relevant assessment year.
- Previous Deadline: Formerly, the window for revision closed on December 31.
- Condition: This extension comes with the requirement of a nominal fee for filings made between January 1 and March 31.
- Why this matters: This change particularly benefits Resident and Ordinarily Resident (ROR) taxpayers who earn foreign income. It helps resolve the “mismatch” between the Indian tax calendar and international calendars (like the U.S. April deadline), allowing them to accurately claim Foreign Tax Credits (FTC).
2. Staggered Timelines for Different Taxpayer Categories
To manage the heavy load on the e-filing portal and ensure smoother processing, the Finance Minister has proposed staggering the original filing deadlines.
- Individual Taxpayers (ITR-1 & ITR-2): For salaried individuals and those with simple income profiles not requiring an audit, the due date remains July 31.
- Non-Audit Business Cases and Trusts: The deadline for businesses and trusts not subject to a tax audit is proposed to be extended to August 31.
- Audit Cases: For businesses requiring a tax audit, the filing deadline typically falls on October 31, with the audit report itself due one month prior (September 30).
3. Belated Returns and Penalties
The rules for filing a Belated Return (filing after the original July/August deadline) have also been aligned with the new revision timeline.
- Final Cut-off: Like revised returns, belated returns can now be submitted until March 31.
- Penalty Structure: Filing after the original due date (e.g., after July 31) still attracts a late filing fee under Section 234F.
- ₹5,000 for taxpayers with total income exceeding ₹5 lakh.
- ₹1,000 if total income is below ₹5 lakh.
- Interest: Interest at 1% per month under Section 234A continues to apply to any unpaid tax liability from the original due date until the actual date of filing.
4. Key Benefits of the Rationalised Calendar
These changes are not merely administrative but are designed to foster a more trust-based tax environment.
- Reduced Litigation: By giving taxpayers more time to correct errors (until March 31), the government aims to reduce the volume of notices issued for “income mismatches” that could have been easily rectified.
- Improved Liquidity: Earlier, missing the December 31 deadline meant losing the chance to file a revised return entirely, often leading to blocked refunds. The new March 31 window ensures taxpayers can still claim rightful refunds even if they are slightly late.
- Ease for Global Workers: The alignment with international tax years simplifies compliance for the growing number of Indian professionals working with global clients or assets.
Conclusion
The rationalisation of due dates in Budget 2026 is a clear step toward taxpayer-friendly administration. By extending the revision window and staggering original deadlines, the government has provided a much-needed “safety net” for honest taxpayers while ensuring the digital infrastructure can handle the massive volume of filings more efficiently.
FCA, CWM (AAFM-US), CBV, CIFRS, R-ID, B.COM (H), RV* (IBBI)
Practising Chartered Accountant in Delhi NCR Since 2011. He can be contacted at ankitgulgulia@gmail.com or +91-9811653975.