Income Tax Updates 2025-26 | ITR 2025-26

1. Extension of ITR Filing Deadline

·        The Central Board of Direct Taxes (CBDT) has extended the due date for filing income tax returns from July 31, 2025 to September 15, 2025 for taxpayers filing under ITR‑2/3 (e.g., individuals with capital gains, business income, freelancers)

·        This also applies to regular non-audit taxpayers, giving everyone extra breathing room following technical delays.

Income Tax Updates 2025-26 | ITR 2025-26


2. Delay in ITR‑2 and ITR‑3 Utility Release

·        While ITR‑1 and ITR‑4 e‑filing tools are live, ITR‑2 and ITR‑3 utilities remain unavailable as of early July 2025 (efiletax.in).

·        The CBDT attributes this to technical enhancements and form revisions, with the extended deadline helping offset compliance pressure (outlookmoney.com).

·        Early filers, such as HNI salaried professionals and business owners, are advised to stay alert and file as soon as utilities are released (businesstoday.in).

3. Slab and Exemption Changes under New Regime

·        New regime (Section 115BAC) has become the default for FY 2025‑26 (AY 2026‑27) (incometax.gov.in).

·        Revised tax slabs:

o   ₹0–4 L: 0%

o   ₹4–8 L: 5%

o   ₹8–12 L: 10%

o   ₹12–16 L: 15%

o   ₹16–20 L: 20%

o   ₹20–24 L: 25%

o   Over ₹24 L: 30% (bajajfinserv.in).

·        Basic exemption limit has been raised to ₹4 L (up from ₹3 L), and Section 87A rebate means zero tax liability for incomes up to ₹12 L under the new regime (bajajfinserv.in).

·        This effectively results in no tax up to ₹12 L, and if standard deduction is ₹75 K, becomes ₹12.75 L (en.wikipedia.org).

4. Old vs New Regime – Opting In/Out

·        Taxpayers can opt out of the new regime each year during ITR filing. For business income, one must submit Form 10‑IEA by the due date (incometax.gov.in).

·        This matters because:

o   Old regime allows claiming deductions (e.g., Section 80C, 24B, etc.).

o   New regime forgoes deductions but offers broader tax slabs and rebates.

·        Use tools or calculators to compare which regime works best based on deductions and income.

5. Cost Inflation Index (CII) Update

·        For capital gains adjustments in FY 2025‑26, the CII has been notified at 376 (taxtmi.com).

·        This will affect indexation calculations for long-term capital assets and should be used in related ITR schedules.

6. Form 64A & 64E Due Date Preponed

·        Reporting by business and securitisation trusts for Form 64A & 64E is now due by June 15, 2025—moved up from Nov 30—through CBDT Notification No. 17/2025 (incometax.gov.in).

7. ITR‑7: Enhanced Disclosure Requirements

·        Trusts, NGOs, universities, political parties, and research institutions filing ITR‑7 must now disclose enhanced details—such as foreign contributions, accumulated funds, and utilization—from April 1, 2025 onward (businesstoday.in).

8. New Income‑Tax Bill Introduced

·        Parliament is considering the Income‑Tax Bill, 2025, which proposes simplifying the current Income‑Tax Act by replacing it with a shorter, clearer version effective April 1, 2026 (reuters.com).

·        Objectives include reducing litigation, introducing clarity, and reorganising into 536 sections compared to 800+ currently.

Summary Table of Key Updates

Update

Details

ITR deadline

Extended to Sept 15, 2025 for ITR‑2/3 and non-audit returns

ITR‑2/3 utilities

Still pending; file ASAP when live

Tax slabs (new regime)

0–4 L: 0%, 4–8 L: 5%, …, 24L+: 30%

Zero tax zone

Incomes ≤ ₹12 L (or ₹12.75 L with ₹75K deduction) pay no tax

CII

Raised to 376 for asset indexation

ITR‑7

Tighter scrutiny & disclosures from April 2025

Income‑Tax Bill

Streamlined law from April 2026

Taxpayer Action Points

1.     File by Sept 15, 2025, especially ITR‑2/3 once tools are available.

2.     Opt for your regime wisely—compare old vs new.

3.     Adjust capital gains using CII = 376.

4.     Trusts & NGOs: comply with ITR‑7 enhanced disclosures.

5.     Stay tuned: utility tool updates and Income‑Tax Bill progress.

 

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