ITR Deadline Extension 2025: Why Lakhs of Taxpayers May Default Despite No Fault of Their Own

Sep 10, 2025

—

in Educational News, Finance and Accounting

Filing Income Tax Returns (ITR) is one of the most critical financial responsibilities for individuals, professionals, and businesses in India. The deadline for Assessment Year 2025–26 was already extended once, shifting from July 31, 2025 to September 15, 2025.

However, as the new deadline approaches, tax experts and chartered accountants are raising concerns that lakhs of taxpayers may miss filing their returns—not because of negligence, but due to systemic challenges and unavoidable circumstances.

This article explores the reasons behind the growing demand for another extension, the risks of missing the deadline, and practical solutions for taxpayers.

Why Professionals Are Demanding an Extension

Several professional bodies and tax associations across the country have urged the government to consider either another extension or time compensation for the following reasons:

Delayed Release of ITR Utilities: Some forms such as ITR-5, ITR-6, and ITR-7 were released much later, leaving insufficient preparation time.
Portal Glitches: Frequent slowdowns, login errors, and mismatches between AIS, TIS, and Form 26AS are slowing down filings.
Increased Compliance Burden: The revised ICAI reporting format for non-corporate entities has added extra work for accountants and auditors.
Festive Season & Holidays: Navratri, Ganesh Chaturthi, Dussehra, and other festivals reduce available working days in September.
Natural Disruptions: Heavy rains and floods in certain regions have further restricted business activity.

Current Status of ITR Filing

Category	Details
Extended Due Date	September 15, 2025
Returns Filed (approx.)	Over 5 crore by early September
Verified Returns	Around 4.7 crore
Processed Returns	Around 3.4 crore
Penalty for Delay	₹1,000 – ₹5,000 + monthly interest
Extension Possibility	Uncertain – Authorities cite smooth filing pace

Why This Matters to Taxpayers

Missing the ITR deadline can have serious consequences:

Late fees ranging from ₹1,000 to ₹5,000 under Section 234F.
Additional interest charges for delayed tax payments.
Loss of carry-forward benefits of business or capital losses.
Increased scrutiny and possible notices from the Income Tax Department.

For many, the issue isn’t unwillingness to comply—it’s the lack of sufficient time and resources to handle portal delays, data mismatches, and added compliance requirements.

Expert Opinions: “Time Compensation” vs Extension

Tax professionals argue that instead of simply extending the deadline, the government should offer time compensation. This means that days lost due to late release of utilities and portal glitches should be compensated with extra filing days.

For instance:

If a form was released 30 days late, taxpayers using that form should automatically get 30 additional days to file.

This approach balances compliance efficiency with fairness.

Practical Tips for Taxpayers

While the government has not confirmed any further extension, here are steps you can take to stay on track:

✅ File Early – Don’t wait until the last day. Portal slowdowns peak near deadlines.
✅ Choose the Right Form – Wrong form selection leads to rejection and refiling delays.
✅ Cross-Check AIS & 26AS – Resolve mismatches well before submission.
✅ Keep Records Ready – Maintain bank statements, TDS certificates, and audit reports in advance.
✅ Consult a CA – If your case involves complex disclosures, professional guidance is crucial.

Conclusion

The current situation highlights a growing gap between taxpayer readiness and system readiness. While the compliance numbers show that a majority have filed, a significant section—particularly businesses and audit-heavy cases—face genuine hurdles.

Whether the government chooses strict deadlines or provides relief through extension/time compensation, one thing is clear: taxpayers must stay prepared, file early, and minimize risks of penalties.

The next few days will be crucial in deciding whether compliance remains smooth—or whether lakhs of taxpayers are pushed into defaults beyond their control.

Frequently Asked Questions (FAQs) on ITR Deadline Extension 2025

1. Will the ITR deadline be extended again in 2025?

The Income Tax Department has already extended the due date to September 15, 2025. While many professional bodies are requesting another extension, the government has not made any announcement. Considering the large number of returns already filed, another extension appears unlikely.

2. What happens if I miss the ITR filing deadline?

If you fail to file your ITR before the deadline, you may face:

Late fees of ₹1,000 to ₹5,000 under Section 234F.
Interest charges under Section 234A.
Loss of carry-forward of losses (business/capital losses).
Possible notices from the Income Tax Department.

3. Why are taxpayers demanding an extension?

Tax professionals highlight several reasons:

Late release of ITR forms (ITR-5, ITR-6, ITR-7).
Portal glitches like login errors and data mismatches.
Increased compliance burden with new reporting formats.
Festive season and natural disruptions reducing working days.

4. What is “time compensation” in ITR filing?

Instead of extending the deadline for everyone, tax experts suggest time compensation. This means taxpayers should get extra filing days equal to the delays caused by late utility releases or portal glitches. For example, if a form was released 30 days late, taxpayers using that form should get 30 extra days.