Budget 2026: The Union Budget 2026 could bring significant changes to the Income Tax Return (ITR) filing timeline. The government has announced a staggered timeline to reduce the burden of return filing.
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Budget 2026: The Union Budget 2026 may bring significant changes to the Income Tax Return (ITR) filing timeline. The government has announced a staggered timeline to reduce the burden of return filing. This means that different dates have been set for different individuals or categories for the same task. However, it’s important to understand that the extended August 31st deadline is not applicable to all taxpayers. For most salaried taxpayers, the old date will remain in effect.
Who will be exempt from filing ITR by August 31st?
According to the budget documents and the Income Tax Department’s FAQs, the August 31st deadline applies only to non-audit business cases and trusts. This includes businesses and professionals whose accounts are not required to be audited. Additionally, partners of non-audit firms, and in some cases, their spouses, also fall under this scope. This relief is especially for small businesses, freelancers and professionals who take more time to finalise accounts.
What’s changed for salaried taxpayers?
If you are salaried and file ITR-1 or ITR-2, there are no changes for you. Such taxpayers will still have to file their ITR by July 31st. Therefore, it would be wrong to assume that the deadline for everyone has been extended to August 31st.
The government has clearly stated that this extension is for select categories, allowing them additional time to prepare under the new income tax framework.
What are non-audit business cases?
Non-audit cases are those where the turnover of a business or profession is below a certain threshold. Typically, businesses with a turnover of less than ₹1 crore or those subject to presumptive taxation are included. Tax audits are not required in such cases, so the government has decided to grant them additional time.
Why Trusts Received Relief?
Trusts are legal entities formed for charitable, religious, or personal purposes. If auditing of their accounts is not required, they can now file their ITR by August 31st. This will ease compliance and reduce the risk of hasty mistakes.
When will this change come into effect?
This new rule has been introduced under Section 263(1)(c) of the Income Tax Act, 2025. It will come into effect from April 1, 2026, and will be effective from the tax year 2026-27 (assessment year 2027-28). A similar amendment has also been made to the old Income Tax Act, 1961, to facilitate a smooth transition. If you are salaried, don’t miss the July 31 deadline. If you are a small business owner, freelancer, or member of a non-audit trust, you will now have until August 31. It is important to understand the correct category to avoid penalties and hassles.
