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Navigating the 2025 Tax Season: Understanding ITR Deadlines and Penalty Avoidance


Navigating the 2025 Tax Season: Understanding ITR Deadlines and Penalty Avoidance

The last date for filing Income Tax Returns (ITR) relating to the financial year 2024-25 (Assessment Year 2025-26) has been officially revised. Pursuant to a recent circular by the Central Board of Direct Taxes (CBDT), the final deadline for non-audit cases—including individuals drawing a salary—has been amended from the earlier date of July 31, 2025, to September 15, 2025.Taxpayers who file their ITR after September 15, 2025, will incur a penalty of ₹5,000 if their taxable income exceeds ₹5 lakh, or ₹1,000 if their income is below that threshold, as specified in Section 234F of the Income Tax Act. Notably, belated or revised returns will continue to be accepted until December 31, 2025, while updated returns, designated as ITR-U, may be submitted up until March 31, 2030.It is crucial to appreciate, however, that the extension of the ITR filing deadline does not alter the obligation to remit any self-assessment tax due. Such payment must be completed by July 31, 2025, or interest—calculated under Section 234A—will be levied for the delay in payment.The extension follows reported delays in the release of revised ITR forms and the corresponding e-filing capabilities on the Income Tax Department’s portal. Additionally, the lagging update of TDS information in Form 26AS and the AIS contributed to filing inconsistencies, prompting numerous taxpayers to request additional time to ensure accuracy in their submissions. Granting the extension also enhances the prospective impact on refund interest calculations. Taxpayers entitled to refunds may accordingly observe an increase of up to 33 percent in the interest under Section 244A, as the entitlement date for interest remains anchored to April 1, irrespective of the extension. It should be noted that such interest is subject to taxation and must be duly reported in the revised ITR. Concurrently, the Income Tax Department has released a new Excel-based offline utility designed for the preparation of Income Tax Return-1 and Income Tax Return-4. This utility facilitates return validation through the generation of a JSON file, which can subsequently be uploaded to the e-filing portal for final submission.

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