Why ITR Filing for AY 2025–26 Is Delayed: 7 Key Reasons You Should Know

The Income Tax Return (ITR) filing season for the Assessment Year 2025–26 (Financial Year 2024–25) has not yet fully begun, causing confusion and concern among taxpayers. Unlike last year, where around 32 lakh ITRs were already filed by this time, this year, taxpayers are still waiting for the utilities to go live on the income tax portal.

So what’s causing this delay? Based on discussions and feedback from viewers on our YouTube channel CA Guruji, along with expert analysis, here are the possible reasons:

1. Major Amendments in Capital Gains Taxation

One of the most significant changes in Income Tax rules came into effect from 23rd July 2024, which introduced dual capital gains tax treatment — one tax rate applicable before 23rd July and a different rate applicable after. This has led to:

• Complexity in computing capital gains
• Changes in reporting structure of Schedule CG in ITR forms
• Delay in finalizing utilities as both scenarios need to be accommodated

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2. Late Notification of ITR Forms

Normally, ITR forms are notified in the first week of April, and the utilities are made live shortly after. However, this year:

• The forms were notified only in May 2025
• Utility development and testing by the Income Tax Department and software companies took additional time

This delay has had a domino effect, slowing down the entire filing process.

3. Government May Want to Defer Refund Payouts

A commonly speculated reason is financial prudence by the government. When taxpayers file early and claim refunds:

• The Income Tax Department must pay interest on delayed refunds (as per Section 244A)
• Delaying utility availability may help reduce early refund claims and thereby limit interest payouts

This could be a fiscal strategy to manage government cash flows, especially in a post-election budgetary environment.

4. Issues Last Year With Rebate Under Section 87A in New Tax Regime

On 5th July 2024, the utility for ITR filing was silently changed. The update disallowed Section 87A rebate on income taxed at special rates (e.g., under Section 111A or 112A) in the new tax regime, which caused:

• Many early filers who claimed this rebate to receive defective return notices
• Increased scrutiny and confusion

This year, the Income Tax Department may be taking more precautions to avoid such issues and release a more stable utility from the beginning.

5. Delay in TDS/TCS Returns and AIS/26AS Updates

While Form 26AS and AIS (Annual Information Statement) are crucial for accurate ITR filing, they are:

• Updated after Form 16, 16A, TDS/TCS returns are filed (deadline: 31st May)
• Officially issued by 15th June

In 2024, many taxpayers who filed ITRs early faced mismatches with updated AIS/26AS and got defective notices. This year, the delay may be a preventive measure to:

• Ensure 26AS and AIS are fully updated before ITR filing begins
• Avoid mismatches and notices

6. Technical Readiness and Utility Testing

The ITR utility is now dynamic and JSON-based, integrated with:

• Prefilled data
• Real-time validations
• Multiple data sources (Form 16, Form 26AS, AIS, TIS, etc.)

This increases development and testing time, especially with new tax changes and validations.

7. Possible Election Year Sensitivity

Although not confirmed, it’s worth noting that FY 2024–25 overlaps with the general election year, and administrative decisions might be under extra scrutiny. Any major tax process rollout could be delayed to ensure policy and legal compliance.

What Taxpayers Should Do

• Wait for stable utilities: Do not rush to file ITR until AIS and Form 26AS are fully updated and validated
• Cross-check all data before filing to avoid defective return notices
• Be alert for utility updates on the official income tax portal
• Watch for Form 16 & 16A which should be issued by 15th June 2025

You can contact team of Tax Experts to file Your ITR at 9150010300 or visit www.legalsahayak.com

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