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ITR-2, ITR-3 delay decoded: Changes, challenges, and what's next
With the income tax return (ITR) filing season underway, millions of taxpayers are in limbo as the utilities for ITR-II and ITR-III are still not live on the Income Tax e-filing portal. These forms cater to salaried individuals with capital gains, professionals, and business owners, not the simplest of categories, and yet, they cannot file returns at the moment.
The Central Board of Direct Taxes (CBDT) has extended the due date for filing ITR-II and ITR-III to September 15, 2025, but experts warn against complacency.
Why the delay?
According to Ritika Nayyar, partner at Singhania & Co, the delay stems from major structural changes to the ITR forms for AY 2025–26.
'These changes required backend system upgrades, utility reprogramming, and extensive validation,' she explains.
Niyati Shah, chartered accountant and vertical head, personal tax at '1 Finance', highlights backend synchronisation issues with the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS), along with efforts to align disclosures with international reporting standards and recent CBDT circulars.
Sameer Mathur, managing director and founder of Roinet Solutions, adds that updates are necessary for capital gains, foreign asset reporting, and presumptive income, all of which make the utility more complex than previous years.
What should taxpayers do now?
Experts unanimously advise proactive preparation.
-Reconciling AIS, TIS, and Form 26AS
-Verifying dividend, interest, and capital gains data
-Computing deductions under Chapter VI-A
-Ensuring advance tax payments to avoid interest under Section 234B
Nayyar adds, 'Having your income computation, deduction proofs, and business ledgers ready will make filing seamless once utilities are out.'
Will refunds and deadlines be impacted?
Though the deadline is extended, the shorter filing window may create bottlenecks. 'Compressed timelines can result in rushed filings, errors, and refund delays,' Shah warns.
Taxpayers may even face interest under Section 234A if they file after September 15 despite the systemic delays,
Mathur cautions.
Extra caution needed once forms are live
Once utilities are released, double-check pre-filled data, cautions Nayyar. Mismatches between AIS/TIS and reported income are among the most common triggers for notices.
Shah advises avoiding assumptions based on last year's forms. 'Validation logic and schema have changed. Engaging a CA is prudent.'
Background: What changed in the ITR Forms this year?
According to Naveen Wadhwa, vice-president at Taxmann, several changes in the new forms triggered this delay.
-LTCG threshold for ITR-1/4 relaxed to ~1.25 lakh under Section 112A -New tax regime opt-out process modified (Form 10-IEA)
-Capital gains reporting restructured of released forms based on the July 23, 2024, transition date
New disclosures added for dividend income from buy-backs, foreign assets, and pass-through incomes under Section 115U
Bottom line: If you're a professional, business owner, or high-income salaried individual, don't wait for the utility to get started. Use this time to get your tax file clean, reconciled, and ready for swift, accurate submission.
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