As of August 2025, the Indian tax ecosystem has undergone several notable updates. From filing extensions and form revisions to new tax relief measures and emerging digitization projects, here’s everything you need to know.

📅 Extended Filing Deadlines & ITR‑U Launch

• The Income Tax Department has extended the ITR filing deadline for the fiscal year 2024–25 (Assessment Year 2025–26) from July 31 to September 15, 2025 for individuals, HUFs, AOPs and other non-audit taxpayers Indiatimes+4India Briefing+4Indiatimes+4Indiatimes+5The Economic Times+5India Briefing+5.

• The ITR‑U form (updated return) introduced via Budget 2025 is now live for AY 2021–22 and AY 2022–23 for ITR‑1/2, and effective April 1, 2025. Taxpayers can rectify omission or inaccuracies within a prescribed window, with penalties based on filing date. The filing window for updated returns extends up to 48 months from end of the assessment year The Economic Times+1.

2. 🧾 ITR Form Updates for AY 2025–26

• All ITR forms (ITR‑1 to ITR‑7) for AY 2025–26 were released, with Excel-based utilities available:

  • ITR‑1 & ITR‑4 from late May 2025

  • ITR‑2 and ITR‑3 utilities from mid-July 2025, including offline-only versions initially India Briefing.

• ITR‑3 online filing is now enabled for AY 2025–26, enabling self-employed professionals, business income earners, F&O traders, and unlisted shareholders to file electronically deccanherald.com+14India Briefing+14The Economic Times+14.

3. 💡 Rule Changes for Specific Income Categories

• Five new profession-specific codes have been added to ITR‑3 and ITR‑4 for AY 2025–26:

  • Influencers (code 16021)

  • F&O traders (21010)

  • Betting business (21009)

  • Commission agents

  • Other gig economy workers
    These changes aim to enhance clarity in classification and compliance for gig/digital income earners Indiatimes+1The Economic Times+3reuters.com+3Indiatimes+3The Economic Times.

• Rebate under Section 87A on capital gains is not auto-applied for AY 2025–26; eligible taxpayers must manually claim the rebate in the ITR form to avoid unexpected tax dues India Briefing+1.

4. 🚨 Penalty Relief & CPC Extensions

• A select committee has proposed relief under the Income Tax Bill, 2025 for small taxpayers who file ITR only to claim tax refunds—exempting them from penalties even if filed late en.wikipedia.org+2The Economic Times+2.

• The Central Processing Centre (CPC) now accepts invalidated ITRs (due to issues like unverified signatures) across all A‑Ys until March 31, 2026—offering relief to affected taxpayers for loan or visa processing delays The Times of India.

5. 🏛️ Digitisation Moves & Legislative Agenda

• The PAN 2.0 modernization project has been awarded to LTIMindtree, targeting a unified PAN infrastructure with broader services rollout in 18 months reuters.com+1.

• The Income‑tax Bill, 2025, tabled in Parliament, proposes sweeping reforms—from eliminating grievances over outdated penalities and updating definitions (e.g. assessment year to tax year), to granting authorities access to digital data sources—subject to final legislative approval by April 2026 implementation date en.wikipedia.org.

✅ Quick Action Checklist

🔍 In Summary

With the ITR filing deadline extended and new filing utilities now available, there’s ample time for taxpayers to comply accurately. The introduction of ITR‑U adds flexibility for rectifying past mistakes. However, manual intervention is still needed for rebate claims and identifying the correct codes for specific income streams. On the horizon, the proposed Income Tax Bill, 2025 and PAN 2.0 ecosystem signal a broader digital transformation in Indian taxation.

Stay ahead with accurate filing and keep an eye on these evolving compliance norms.