Why Was The Release of ITR Forms Was Delayed For AY 2025-26?

Taxpayers have expressed concern over the delayed timing of this year's ITR Form (Income Tax Return). The release of Income Tax Return (ITR) forms for the Assessment Year (AY) 2025-26 was delayed due to the result of the many recent regulatory updates the Government has made to align many different reporting frameworks & ITR systems.

Due to the delay, the non-audit cases' original deadline of July 31, 2025, was repeatedly postponed until September 16, 2025.

The Central Board of Direct Taxes has implemented many significant regulatory updates within the last twelve months to change how taxpayers disclose their income and other disclosures. The CBDT changed the format for reporting capital gains as part of the most recent updates.

The CBDT also changed how an individual discloses their foreign assets, how individuals reconcile their TDS and TCS information and the expanding parameters for matching information regarding Capital Gain Data as reported on the AIS and TIS.

"To accommodate all of these updates, the tax department adjusted the schema structure for all ITR forms and filing programs. These systems are extremely complicated to design, so further testing and synchronisation will be required in order to ensure that they function correctly and consistently across all platforms," said Gaurav Jain, Partner, Direct Tax, Forvis Mazars India.

When multiple regulatory changes occur simultaneously in the same rollout period, extending the timeframe for releasing will naturally result in longer lead times as the department assembles its product line.

By following this process, the department will lessen the potential for revising forms during the active filing season and thus minimise any confusion and difficulties associated with compliance for taxpayers.

"Although a delay may not seem advantageous to taxpayers, the situation does provide the taxpayer with an excellent opportunity to prepare themselves. As there will likely be a growing amount of automated matching and scrutiny of taxpayer information, proactive preparation is now even more critical than ever before," commented Gaurav Jain.

To assist taxpayers, they should begin the reconciliation of the three central databases that will serve as verification for the income tax department: Form 26AS, AIS and TIS.

These three databases represent the primary verification databases for income tax, and any mismatches among these databases will be among the most frequent causes of receiving automated notices from the income tax department. By ensuring consistency among the three verification databases, taxpayers will decrease the frequency of receiving follow-up notices from the income tax department.

"Taxpayers who receive a salary should confirm that the amount of tax deducted at source (TDS) on their salary, as recorded in Form 26AS, is accurate compared to what is presented by their employer(s). If there are discrepancies, then taxpayers should address these issues before filing their return so that there are no delays in the filing process or the need for a tax return correction thereafter," stated Gaurav Jain.

Businesses must ensure that all accounting documentation, GST returns and TDS filings are reconciled with one another. Any discrepancies between any of these sets of information can create additional scrutiny and lead to unnecessarily large numbers of notices or assessments.

Taxpayers using the time period prior to the release of the income tax return (ITR) utilities to bring their documents together, reconcile their information, and generate a correct computation of income will experience a much more efficient and faster filing process once the ITR utilities are available. Furthermore, taxpayers who prepare for their expected filing now significantly lower their risk of encountering errors, mismatches, and subsequently facing scrutiny from tax authorities.

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