India extends deadline for filing of Income Tax Returns

India’s Central Board of Direct Taxes (CBDT) has extended the deadline for filing Income Tax Returns (ITRs) to 15 September from 31 July 2025, due to structural changes and system updates.

The CBDT said it has revised the Income Tax Return (ITR) Forms 1 to 7 for the tax year 2024-25 in order to simplify compliance and enhance transparency.

Key changes include allowing salaried individuals and small business owners with long-term capital gains up to INR 1,25,000 (around £1,000) to use simpler Form ITR-1 or ITR-4. It has also revised the capital gains schedule by changing tax rates effective from 23 July 2024; and it will treat gains from unlisted bonds and debentures as short-term capital gains (STCGs), effective from 23 July 2024.

The CBDT statement, released at the end of May 2025, said the moves were due to substantial structural and content revision in the notified ITR forms, requiring additional time for system development, integration and testing of filing utilities.

The statement said: “With an aim to facilitate a smooth and accurate filing, as well as to address stakeholder concerns and ensure compliance without undue pressure on taxpayers, the CBDT has now extended the due date for filing ITRs for tax year 2024-25 from 31 July 2025 to 15 September 2025.” It said the extension was relevant for individuals, HUF and partnership firms not covered by tax audit requirements.

Commenting on the delays, EY India said: “This is a welcome move, allowing the taxpayers sufficient time to meet enhanced reporting requirements amid recent tax law amendments.

“Unlike in the recent past, when the said forms were typically released well in advance, typically in February or March prior to the end of the tax year, this year, the ITR forms were released belatedly. This had led to the expectation from taxpayers that the department may need to extend the deadline for filing income tax returns.

“On other hand, even for the tax department, the extension is viewed as a necessity for allowing the requisite time to update the utilities, given the changed taxation rules and tax rates.”

And Sandeep Sehgal, partner-tax at AKM Global, a tax and consulting firm, commented: “Given the complexity and increased reporting requirements in the revised ITR forms, including more granular disclosures of capital gains, foreign income, and asset ownership, the extension offers much-needed relief to taxpayers.”

The additional time, Sehgal added, is intended to facilitate a smoother transition to the new compliance regime, allowing taxpayers to correctly interpret the updated requirements, and ensure accurate and complete return filings.

India’s finance ministry said its programme of tax policy reforms “are geared to widen the tax base, detect undeclared income through data matching and promote digital compliance”.

Services sector grows in May on the back of strong exports

India’s services sector maintained its growth trajectory in May, helped by strong export demand and record hiring, according to a newly published survey.

The HSBC India services purchasing managers’ index (PMI), compiled by S&P Global, stood at 58.8 in May, marginally up from 58.7 in April. The index has been above the neutral 50 mark, which separates contraction from expansion, for 46 consecutive months.

“A key area of strength was exports, with survey participants reporting one of the strongest improvements in international demand in 19-and-a-half years of data collection,” said the survey.

Growth was helped by buoyant demand, new client wins and greater staffing capacity. New orders rose at a sharp pace, largely aligning with those registered from February to April, the survey said.

“Advertising, demand strength and repeat orders from existing clients were some of the reasons panellists gave for the upturn in sales,” it added.