Income Tax Latest News 2025: Deadline Extended, Penalties, TDS/TCS Rules, and Capital Gains Relief

Income Tax Latest News, Income tax ,GST file,

Tax season 2025 has brought some big changes for Indian taxpayers. From extended deadlines for filing Income Tax Returns (ITR) to strict timelines for TDS/TCS corrections, and new opportunities to save on capital gains tax, there are many updates you must know. This article covers all the fresh income tax news for September 2025 in detail.

Table of Contents

ITR Filing Deadline Extended to September 15, 2025

The Indian government has extended the last date to file Income Tax Returns (ITR) for FY 2024-25 (AY 2025-26) to 15 September 2025.

This extension benefits individual taxpayers, salaried employees, HUFs, and small businesses who are not required to get their accounts audited.
The deadline extension aims to ease the filing pressure and provide extra time for taxpayers facing technical glitches on the official portal.

⚠️ Reminder: The extended deadline applies only to non-audit cases. Businesses or professionals requiring audit must follow the standard audit filing timelines.

Penalties for Missing the Due Date

Filing your ITR after the September 15 deadline can invite several penalties under the Income Tax Act, 1961.

Late fees under Section 234F – ₹1,000 to ₹5,000 depending on taxable income.
Interest under Section 234A – Charged on outstanding tax liability.
Refund delays – Your eligible tax refunds will be processed late.
Scrutiny risks – The Income Tax Department may put late returns under closer examination.

💡 Tip: File your return early to avoid last-minute rush and ensure smooth processing.

New Deadline for TDS/TCS Statement Corrections

The Income Tax Department has issued a fresh deadline for correcting TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) statements.

All corrections from Q4 FY 2018-19 to Q3 FY 2023-24 must be completed by 31 March 2026.
Missing this deadline means errors like mismatches in Form 26AS or AIS could stay unresolved, possibly leading to tax notices and disputes.

Cost of Filing ITR on Private Platforms

While the official income tax portal allows taxpayers to file returns for free, many choose private tax-filing platforms or Chartered Accountants for professional assistance.

Simple returns (salaried individuals) can often be filed free or at low cost.
Complex returns (capital gains, multiple incomes, foreign income, business income) usually attract higher charges.
Fees across platforms vary widely, from ₹500 to ₹10,000 depending on complexity and review process.

📌 Pro Tip: Salaried taxpayers with only one income source should use the free government portal, while investors and business owners may benefit from expert help.

Simplified Filing with Pre-Filled ITR Forms

The Income Tax Department has worked to make the ITR filing process smoother with:

Pre-filled ITR forms including salary details, TDS, interest income, and capital gains.
Aadhaar OTP-based verification for faster return submission.
Excel/Offline utilities available for various ITR forms.

This move reduces errors and helps even first-time taxpayers file easily.

Calls for Another Extension

Despite the extension to 15 September 2025, many tax professionals and Members of Parliament are urging the government to extend the deadline further.

Complaints of portal glitches, delayed updates in utilities, and server slowdowns have been common.
As of now, the government has not announced any further extensions. Taxpayers are advised not to wait for another relief.

Long-Term Capital Gains (LTCG) Relief Under Section 54F

One of the major concerns this year is the 12.5% LTCG tax on the sale of shares, mutual funds, property, and gold.

Taxpayers can save tax by reinvesting gains in a residential property under Section 54F.
This exemption applies only if the reinvestment is made within the prescribed timeline.
Proper documentation is a must to avoid disputes later.

Key Action Points for Taxpayers

Here’s what you should do right away:

File ITR before 15 September 2025 to avoid late fees.
Check TDS/TCS statements and correct mismatches before 31 March 2026.
Use the government portal for simple returns and avoid paying extra fees.
Explore capital gains exemptions to minimize tax burden.
Maintain financial documents like Form 16, AIS, and bank statements for easy verification.

FAQs on Income Tax Updates 2025

Q1. What is the last date to file ITR for AY 2025-26?
The last date for non-audit taxpayers is 15 September 2025.

Q2. What happens if I miss the ITR filing deadline?
You may face late fees up to ₹5,000, interest charges, refund delays, and increased scrutiny.

Q3. Can I correct TDS/TCS errors later?
Yes, but only until 31 March 2026. After that, corrections won’t be allowed for earlier years.

Q4. Is filing ITR free in India?
Yes, filing on the government portal is free. However, private websites and professionals may charge fees for assistance.

Q5. How can I save tax on LTCG?
You can claim exemption under Section 54F by reinvesting gains into residential property within the given time.

Q6. Has the government announced another ITR extension?
As of now, no further extension beyond 15 September 2025 has been announced.

Q7. What documents do I need for ITR filing?
Form 16, Form 26AS, AIS, bank statements, investment proofs, and capital gains statements if applicable.

Q8. Is Aadhaar mandatory for ITR filing?
Yes, Aadhaar is mandatory for e-verification and linking with PAN.

Q9. Can I file ITR if I missed the deadline?
Yes, you can file a belated return, but with penalties and interest.

Q10. What is the penalty under Section 234F?
A maximum of ₹5,000 is levied as a penalty for filing ITR late.