ITR Filing AY 2025-26: Govt Extends Deadline, But Only 40% Returns Processed Yet

Published On: August 22, 2025

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The government has extended the ITR filing deadline for AY 2025-26 to September 15, giving taxpayers extra time to submit returns. However, only about 40% of filed returns have been processed so far, causing delays in refunds and creating concerns for individuals and businesses. This detailed guide explains why the deadline was extended, the current status of ITR utilities, and the reasons behind slow processing.

Learn what ITR utilities are, how to choose the right ITR form, common mistakes to avoid, and a step-by-step filing process to make your return accurate and stress-free. Whether you’re a salaried individual, self-employed professional, or investor, this article offers simple, human-friendly insights to help you file confidently before the due date. Don’t wait until the last day—file early and avoid refund delays.

Introduction

Every year, the Income Tax Return (ITR) filing season arrives with the same mix of anxiety and urgency for taxpayers. Salaried individuals, self-employed professionals, small business owners, investors, and even senior citizens—everyone has to go through this important exercise. For the Assessment Year (AY) 2025-26, things have taken a slightly unusual turn.

The government has announced an extension of the ITR filing deadline, moving it from the original July 31, 2025, to September 15, 2025. This move was meant to give taxpayers more time to file their returns without the usual last-minute chaos. However, the surprising reality is that even though crores of returns have been filed so far, only about 40% have actually been processed by the Income Tax Department.

This situation raises some important questions. Why was the deadline extended? What exactly are ITR utilities and why do they matter? What is causing the delay in processing? And, most importantly, what should taxpayers do now?

Let’s break it all down step by step in a friendly, easy-to-understand guide that will not only explain the current situation but also help you file your return smoothly and avoid common pitfalls.

ITR Filing 2026: Big Changes You Must Know – Refunds, TDS & More

1. Why Was the ITR Filing Deadline Extended?

The original deadline

Typically, the last date to file an ITR for individuals and non-audit cases is July 31 every year. This is the standard deadline unless the government issues an extension.

The new deadline

For AY 2025-26, the government extended the deadline to September 15, 2025. This means taxpayers have around six extra weeks to complete the filing process.

The reason behind the extension

The extension was not random. It was mainly because:

ITR utilities were not fully ready in time for all forms.
Some new reporting requirements and disclosure rules were introduced this year.
Many taxpayers and tax professionals reported difficulties in filing returns due to system updates and software readiness.

In short, the extension was aimed at providing relief and ensuring that taxpayers do not rush into filing with incomplete or inaccurate details.

2. What Are ITR Utilities?

If you’ve ever filed your ITR online, you’ve probably used something called an “ITR utility.”

Think of ITR utilities as digital tools or helpers created by the Income Tax Department to simplify the filing process.

Types of utilities

Online utility – Available directly on the e-filing website. You log in, fill your form, validate it, and submit.
Offline utility (Excel/JSON based) – You download the form for your respective ITR (say ITR-1 or ITR-3), fill it offline on your system, and then upload it back to the portal.

Why utilities matter

They make sure all calculations are correct.
They highlight missing fields or mismatched information.
They prevent filing with errors that could otherwise lead to notices later.

In simple words, ITR utilities are the framework that makes your return filing foolproof and less stressful.

3. The Current Status of ITR Utilities

For AY 2025-26, the utilities were rolled out in phases instead of all at once.

The basic forms like ITR-1 and ITR-4 were released first.
The more complex forms like ITR-6 and ITR-7 were released much later, closer to August.

This delay caused a chain reaction:

Tax professionals had less time to work on returns for their clients.
Businesses and organizations required ITR-6/7 had to wait longer.
Individuals with complex incomes also faced difficulties because their applicable utilities weren’t available initially.

By mid-August, all utilities were finally available. But the late release had already slowed down the process, creating a huge backlog.

4. Why Only 40% of Returns Have Been Processed

Even though millions of taxpayers have already filed their returns, only around 40% of those have been processed so far. Let’s understand why.

a) System delays

The e-filing portal is dealing with a massive volume of returns in a shorter window of time, thanks to the late release of utilities. Processing takes time, and the system is struggling to catch up.

b) New disclosure requirements

This year, ITR forms require more detailed information. For example:

Policy numbers for claiming deductions under Section 80C.
Complete details of rent receipts and landlord PAN for HRA claims.
Specifics about capital gains, digital assets, and dividend income.

These extra details mean longer verification times.

c) Technical glitches

Some taxpayers and professionals have reported issues where refunds are slightly lower than expected due to software errors like incorrect rounding or mismatch in credit. While such glitches are being fixed, they contribute to slower processing.

d) Verification lag

Even after filing, returns must be verified by the taxpayer (through Aadhaar OTP, net banking, or sending a physical ITR-V). Delays in verification also hold back processing.

5. What This Means for You

If you are yet to file your ITR for AY 2025-26, here’s what this situation means for you:

Don’t wait till the last day – The system load on September 14 and 15 will be enormous. Filing early means less stress and fewer chances of portal crashes.
Early filing = faster refunds – Returns filed earlier are usually processed earlier. Waiting until the last minute may mean waiting months for your refund.
Accuracy is more important than speed – Since forms require more details this year, double-check every entry to avoid notices later.
Don’t expect another extension – While some industry bodies are requesting another extension, there is no guarantee. It’s smarter to assume September 15 is final.

6. Step-by-Step Guide to Filing Your ITR Smoothly

To make things easier, here’s a friendly step-by-step process:

Step 1: Know which ITR form you need

ITR-1 (Sahaj): For salaried individuals with income up to ₹50 lakh, one house property, and interest income.
ITR-2: For individuals with capital gains, foreign income, multiple house properties, but no business income.
ITR-3: For those with business/professional income.
ITR-4 (Sugam): For presumptive business income under sections 44AD, 44ADA, etc.
ITR-5/6/7: For firms, LLPs, companies, and trusts.

Step 2: Collect your documents

Form 16 (from your employer).
Form 26AS (tax credit statement).
AIS/TIS (Annual Information Statement).
Investment proofs for deductions (LIC, PPF, ELSS, health insurance).
Bank interest statements.
Rent receipts if claiming HRA.
Capital gains statements if you sold shares, property, or crypto.

Step 3: Use the correct utility

Download the latest ITR utility for your form (Excel/JSON) or file directly online.

Step 4: Fill in the details

Start with your personal information.
Enter income details from salary, business, house property, and other sources.
Fill in deduction claims (80C, 80D, 80G, etc.).
Declare capital gains, dividend income, and digital assets if applicable.

Step 5: Validate and calculate

The utility will automatically compute your tax liability or refund. Make sure there are no errors flagged.

Step 6: Submit and verify

Upload the return to the portal.
Verify it immediately using Aadhaar OTP, net banking, or through a physical ITR-V form.

Step 7: Track refund status

Keep checking the portal for updates. If there’s a mismatch, raise a grievance quickly.

7. Common Mistakes to Avoid

Filing under the wrong ITR form (very common).
Forgetting to report interest income from savings accounts or FDs.
Claiming deductions without proper documentary proof.
Not verifying the return after submission.
Waiting till the last day to file.

8. Pro Tips for This Year’s Filing

Check AIS carefully: The Annual Information Statement contains income details reported by banks, employers, and institutions. If you miss something that’s in AIS, it could trigger a notice.
Use pre-filled data wisely: The portal auto-fills many details, but always cross-verify.
Double-check refund amounts: With glitches reported, ensure your expected refund matches what’s processed.
Plan for next year early: Keep documents organized month by month instead of hunting for them during filing season.

Conclusion

The ITR filing season for AY 2025-26 has been a rollercoaster so far. On one hand, taxpayers have been given extra time until September 15, 2025. On the other hand, the fact that only 40% of returns have been processed despite crores of filings highlights the pressure on the system and the importance of timely, accurate submissions.

The key takeaway for you is simple:

File early.
Use the correct form.
Double-check your details.
Don’t wait for another extension.

With the right preparation and a calm approach, filing your return doesn’t have to be stressful—it can be just another financial milestone you check off confidently.

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