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 ease the burden of return filing. This means different dates have been set for different individuals or categories for the same task. However, it’s important to understand that the extended August 31 deadline does not apply to all taxpayers. For most salaried taxpayers, the old deadline will remain in effect.
Who will get exemption to file ITR by August 31?
According to the budget document and the Income Tax Department’s FAQs, the August 31 deadline applies only to non-audit business cases and trusts. This includes businesses and professionals whose accounts are not required to be audited. Partners of non-audit firms, and in some cases, their spouses, also fall under this category. This relief is especially applicable to small businesses, freelancers, and professionals who often face longer time-consuming accounting finalizations.
What 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 need to file their ITR by July 31st. Therefore, it would be wrong to assume that August 31st is the deadline for everyone.
The government has clearly stated that this extension is for select categories, so that they can get 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, these include businesses with a turnover of less than Rs 1 crore or individuals subject to presumptive taxation. A tax audit is not required in such cases, so the government has decided to grant them additional time.
Why did the trusts get relief?
Trusts are legal entities formed for charitable, religious, or personal purposes. If their accounts are not subject to audit, they can now file their ITR by August 31st. This will simplify compliance and reduce the risk of hasty errors.
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 time until August 31. It is important to understand the correct category to avoid penalties and hassles.
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