How the ITR Filing Last Date Extension Impacts Salaried and Business Taxpayers

The extension of the Income Tax Return (ITR) filing deadline for Financial Year (FY) 2024-25 (Assessment Year 2025-26) by the Central Board of Direct Taxes (CBDT) has provided taxpayers with more time to meet their filing obligations. Initially set for July 31, 2025, the new deadline is now September 15, 2025. This change has significant implications for both salaried individuals and business taxpayers. For salaried taxpayers, the extra time ensures that they can properly review and finalize their returns. Business taxpayers can also take advantage of this extended period to address any complex financial issues or audit requirements before submission. However, despite the additional time, there are penalties for failing to file on time, making it essential for taxpayers to understand the impact of this extension and file their returns as soon as possible. Lets explore how the extended deadline affects different categories of taxpayers, including salaried and business taxpayers, the penalties for missing the deadline, and how platforms like TaxBuddy can simplify the process.

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Table of Contents

• Impact of the ITR Filing Last Date Extension on Salaried Taxpayers

• How the Extension Affects Business Taxpayers

• Penalties for Missing the Extended Deadline

• How TaxBuddy Helps You with ITR Filing

• Conclusion

• FAQs

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Impact of the ITR Filing Last Date Extension on Salaried Taxpayers

For salaried taxpayers, the extension of the ITR filing deadline provides an important opportunity to ensure that all required information is accurately reported in the return. Many salaried individuals may rely on Form 16 from their employers, but issues such as missing TDS credits, incorrect deductions, or overlooked income sources can complicate the filing process. The extension allows them to double-check these details and ensure accuracy.

The extra time also offers a chance to review potential deductions under sections such as 80C (for investments), 80D (for insurance premiums), and 10(13A) (for House Rent Allowance). It’s common for salaried individuals to overlook these deductions, which could lower their taxable income and reduce their overall tax liability. With the extension, there is no rush, giving taxpayers the opportunity to maximize their tax savings.

Furthermore, taxpayers who might have received incorrect or incomplete Form 16 can now follow up with their employers, ensuring the information on the form matches their actual earnings and deductions.

How the Extension Affects Business Taxpayers

Business taxpayers, especially those with complex financial structures, are greatly impacted by the extension. For businesses requiring audits, the filing deadline has been moved to October 31, 2025, providing them with more time to complete their audits and gather necessary documentation. Small and medium-sized businesses, in particular, often face delays due to inadequate record-keeping or missing financial statements. The extended deadline allows them to address any discrepancies before submission.

For businesses with international transactions or transfer pricing concerns, the deadline has been pushed to November 30, 2025, which is crucial for preparing the transfer pricing reports and gathering supporting documentation. The extra time is especially important for businesses involved in cross-border transactions, as these typically require a more in-depth review of their tax positions and compliance with international tax regulations.

Additionally, businesses can use the extension to review tax-saving investments, calculate depreciation accurately, and ensure that all allowable expenses are accounted for. This extension provides businesses with the flexibility to avoid rushed filings and minimize the risk of errors or omissions.

Penalties for Missing the Extended Deadline

While the extension of the Income Tax Return (ITR) filing deadline from July 31, 2025, to September 15, 2025, provides taxpayers with much-needed relief, failing to meet even this extended deadline can still result in penalties. It is essential to understand the implications of missing the new deadline, as penalties and interest charges can accumulate quickly, leading to increased financial burdens.

Penalties for Late Filing:

1. Penalty for Salaried Individuals (Section 234F) For salaried individuals, if the return is filed after the extended deadline of September 15, 2025, but before the end of the assessment year (i.e., before March 31, 2026), a penalty under Section 234F will be applicable. The penalty for late filing can range from ₹1,000 to ₹5,000, depending on when the return is filed. Here's the breakdown of the penalty structure:

• If you file your return before December 31, 2025, the penalty is ₹1,000.

• If you file after December 31, 2025, and before March 31, 2026, the penalty increases to ₹5,000.

2. Interest Under Sections 234A, 234B, and 234C In addition to the penalty, interest will also be charged on any unpaid taxes for the period after the due date. These interest provisions are laid out under Section 234A, Section 234B, and Section 234C:

• Section 234A (Interest for Late Filing): This section imposes interest at 1% per month on the tax due if the return is filed after the original due date. The interest will accumulate for each month or part of the month that the return is delayed.

• Section 234B (Interest on Underpaid Tax): If the taxpayer has not paid advance tax or self-assessment tax, interest under Section 234B will be charged at 1% per month on the amount of tax due from the taxpayer.

• Section 234C (Interest on Deferred Payment of Advance Tax): If you fail to pay advance tax or delay the payment, interest under Section 234C will be levied. The interest rate for this is 1% per month on the delayed amount for each quarter of the financial year.

3. Impact of Penalties and Interest on Salaried Individuals The cumulative effect of penalties and interest can result in a significant financial burden for taxpayers who miss the September 15 deadline. For instance, if you owe ₹50,000 in taxes, and you file your return three months late, you could face interest charges of ₹1,500 (1% per month) in addition to the penalty. This increases the overall amount you owe to the government, making it financially disadvantageous to delay filing, even if you are allowed to file a belated return.

Penalties for Businesses:

1. Penalty for Businesses Missing the Extended Deadline Businesses face the same penalties for late filing under Section 234F as individual taxpayers. However, businesses often have more complex returns, and missing the extended deadline can be particularly costly. Businesses are also subject to higher penalties depending on the size and complexity of their returns. For instance, small businesses with straightforward returns may face penalties on the lower end of the scale (₹1,000 to ₹5,000), while larger businesses with complex financial statements, audits, and tax calculations may see higher penalties due to the delayed filing.

2. Interest for Late Tax Payments Beyond the penalty for missing the deadline, businesses will also face interest charges for any unpaid taxes. The interest is calculated under Sections 234A, 234B, and 234C in the same way as it applies to individual taxpayers. This means that businesses will pay interest at the rate of 1% per month for each month or part of a month that the taxes remain unpaid after the deadline. For large businesses, the tax liability can be substantial, and the interest charges will compound over time.

3. Additional Financial Implications for Businesses In addition to penalties and interest, businesses may also face operational disruptions as a result of late filing. Filing after the deadline may require additional documentation, manual reconciliation of financial data, and even potential scrutiny from tax authorities. This could lead to additional administrative costs, further delaying the refund process, and causing strain on the business's financial resources.

The Financial Impact of Delayed Filing: The cumulative impact of penalties, interest, and administrative costs can significantly affect both individual and business taxpayers. The total amount owed can increase rapidly, leading to unnecessary financial stress. Furthermore, late filing delays the processing of refunds, which is particularly concerning for businesses that depend on these refunds for liquidity and cash flow management. For salaried individuals, the delays in receiving refunds mean that they miss out on the timely return of excess taxes paid, while businesses face challenges in cash flow management and overall financial planning.

How TaxBuddy Helps You with ITR Filing

TaxBuddy is a comprehensive tax filing platform that makes it easier for both individuals and businesses to file their returns on time. It simplifies the entire process, helping you navigate complex tax regulations and ensuring accuracy in your filings. TaxBuddy's platform offers both self-filing options and expert-assisted services for those who need additional support.

For salaried taxpayers, TaxBuddy makes it easy to upload and verify Form 16, automatically populating your return with the necessary data. It also checks for common mistakes and ensures that you claim all eligible deductions, maximizing your potential tax savings. The platform provides step-by-step guidance, making the process stress-free and user-friendly.

For businesses, TaxBuddy helps streamline the entire filing process, ensuring that all financial documents, audits, and transfer pricing reports are accurately handled. It allows businesses to file within the extended deadlines without missing crucial details, minimizing the risk of penalties and audits. TaxBuddy's AI-driven platform also ensures that all TDS credits, depreciation calculations, and allowable expenses are correctly applied, offering a smooth filing experience.

Whether you’re a salaried individual or a business taxpayer, TaxBuddy provides the tools and support you need to meet the new deadlines and avoid penalties, ensuring a hassle-free filing experience.

Conclusion

The ITR filing deadline extension provides much-needed relief to salaried and business taxpayers. It is essential to take advantage of this time to gather necessary documents, plan taxes effectively, and avoid mistakes that could lead to penalties. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.

Frequently Asked Question (FAQs)

Q1: Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?

Yes, TaxBuddy offers both self-filing and expert-assisted plans. Self-filing is perfect for those who are familiar with the process and comfortable filing their returns independently, while the expert-assisted plan provides professional support to ensure accuracy and compliance. You can choose the plan that best suits your needs.

Q2: Which is the best site to file ITR?

The best site for ITR filing depends on your preferences. TaxBuddy provides a comprehensive, user-friendly platform for both self-filing and expert-assisted ITR filing. It simplifies the process, offers AI-powered tools for error-free filing, and provides expert assistance to ensure accuracy and compliance. The official Income Tax Department portal is another option, but TaxBuddy offers a more streamlined and supportive experience.

Q3: Where to file an income tax return?

Income tax returns can be filed on the official Income Tax Department portal at incometax.gov.in or through third-party platforms like TaxBuddy, which offer an easier, more efficient filing process. TaxBuddy helps you avoid mistakes and guides you through the complexities of the filing process, making it an excellent choice for many taxpayers.

Q4: Can I file my ITR after the extended deadline without penalties?

No, if you file after the extended deadline of September 15, 2025, you will incur penalties and interest on any unpaid taxes. However, you can still file a belated return by December 31, 2025, but penalties will apply, and your refund processing may be delayed.

Q5: What happens if I fail to file ITR within the extended deadline?

If you miss the extended deadline of September 15, 2025, for FY 2024-25 (Assessment Year 2025-26), you can file a belated return until December 31, 2025. However, penalties will be applied for late filing, and the processing of any refund will be delayed compared to those who file on time.

Q6: How do I check the status of my income tax refund?

To check your income tax refund status, you can visit the official Income Tax Department portal. You will need your PAN number and the assessment year details to track the status of your refund. If you’ve filed through TaxBuddy, you can also track your refund status directly through the platform.

Q7: Does TaxBuddy assist with TDS credit verification?

Yes, TaxBuddy helps verify TDS credits to ensure they are correctly reflected in your tax return. This is essential for accurate tax filing and prevents mismatches, which could otherwise delay refund processing. TaxBuddy's system ensures the correct matching of TDS records to help you file without errors.

Q8: How long does it take for TaxBuddy to process an ITR filing?

The time taken to process an ITR filing on TaxBuddy depends on the complexity of your return. For simple, straightforward returns, it can be processed in a few hours. If you require expert assistance, the process may take longer, depending on the level of support needed. TaxBuddy works efficiently to ensure your return is filed correctly and on time.

Q9: What if I file ITR after the extended deadline?

If you file your ITR after the extended deadline, you can still file a belated return by December 31, 2025, but you will face penalties, and the refund processing will be delayed. It’s best to file your return before the deadline to avoid additional charges and complications.

Q10: Are there penalties for errors in my ITR filing?

Yes, errors in your ITR filing, such as incorrect income reporting, missing deductions, or wrong TDS credits, can lead to penalties and delays. TaxBuddy offers tools to minimize the risk of errors, ensuring an accurate filing. In case of mistakes, TaxBuddy also supports the filing of revised returns to correct discrepancies and avoid penalties.

Q11: Can I make corrections in my ITR after filing?

Yes, if you find any errors after submitting your ITR, you can file a revised return. A revised return can be submitted before the end of the assessment year to correct any mistakes, such as misreported income or missed deductions. Filing a revised return helps ensure your tax records are accurate and prevents penalties.

Q12: Does TaxBuddy support all tax regimes for ITR filing?

Yes, TaxBuddy supports both the old and new tax regimes for ITR filing. Whether you wish to take advantage of exemptions and deductions under the old tax regime or prefer the simplified approach of the new tax regime, TaxBuddy helps you select the best option based on your income and financial situation.