Union Budget 2026: ITR revision deadline extended to March 31

In a significant taxpayer-friendly reform announced in the Union Budget 2026–27, Finance Minister Nirmala Sitharaman on Sunday proposed extending the deadline for filing revised income-tax returns (ITRs) from 31 December to 31 March of the relevant financial year. The change, to be implemented under the forthcoming Income Tax Act, 2025, is aimed at improving voluntary compliance and reducing avoidable disputes.

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Addressing Parliament during her Budget speech, Sitharaman said the new legislation would come into force from 1 April 2026, with rules and updated tax return forms to be notified shortly.

Revised return window extended to end of financial year

Announcing the extension, the finance minister said: “I propose to extend the time available for revising returns from 31 December to up to 31 March with the payment of a nominal fee. I also propose to stagger the timeline for filing of tax returns - individuals with ITR 1 and ITR 2 will continue to file till 31 July, and non-audit business cases or trusts are proposed to be allowed time till 31 August.”

The revised timeline marks a departure from the existing framework, under which taxpayers had a limited time after the original filing deadline to correct errors or disclose omitted income. By allowing revisions until the close of the financial year, the government aims to provide a more realistic compliance window.

Staggered deadlines for different taxpayer categories

Under the proposed system, individuals filing simpler returns—ITR-1 and ITR-2—will continue to have 31 July as their due date. Non-audit business cases and trusts, meanwhile, will be given additional time, with a revised deadline of 31 August.

According to officials, staggering deadlines is intended to ease pressure on both taxpayers and the tax administration, while ensuring smoother processing of returns and assessments.

Income Tax Act, 2025, to take effect from 1 April

Sitharaman also confirmed that the Income Tax Act, 2025, will be implemented from 1 April 2026. The new law is expected to simplify statutory provisions, modernise tax administration, and align compliance processes with a more digital, rules-based framework.

The government has indicated that detailed rules and ITR forms will be notified in the coming weeks.

Relief for salaried individuals and small taxpayers

Tax experts say the extended revision window will particularly benefit salaried individuals, professionals and small taxpayers, who often receive updated financial information—such as revised Form 16s, interest statements or investment disclosures—after the original filing deadline.

By enabling corrections until 31 March, the government hopes to reduce inadvertent non-compliance, lower the incidence of litigation and encourage accurate self-reporting. The move is also expected to ease reconciliation challenges and support a more trust-based relationship between taxpayers and the revenue authorities.