"Speed is irrelevant if you’re going in the wrong direction." – Mahatma Gandhi
As the new financial year unfolds, both individual taxpayers and tax professionals are observing an unusual delay in the start of the income tax return (ITR) filing season for Assessment Year (AY) 2025–26. The release of the filing utility has been slower compared to previous years, leading to speculation and concern among early filers.
However, this delay is not accidental, nor is it necessarily negative. It appears to be a deliberate policy decision by the Central Board of Direct Taxes (CBDT), intended to balance system readiness with taxpayer convenience. Rather than rushing to allow early submissions, the focus this year seems to be on stability, accuracy, and alignment with the significant policy changes introduced through the Finance Act, 2024.
This article outlines seven critical reasons for the delay in ITR utility release and explains why filing after 15th June 2025 is not just reasonable, but advisable.
1. Complex Capital Gains Computation for FY 2024–25
The Finance Act 2024 has introduced a dual-period taxation regime for capital gains, which is particularly relevant for equity and mutual fund transactions.
Gains accrued before 23rd July 2024 are subject to one regime, while gains from 23rd July onward follow a different tax treatment. This has necessitated substantial backend enhancements in the ITR utilities, particularly within Schedule CG, which must now bifurcate transactions across the two periods.
If the utility were released prematurely without accurately reflecting these changes, taxpayers could face incorrect tax computations, notices, and the need for rectifications or revised returns. The complexity of handling two concurrent calculation methods makes careful utility development imperative.
2. Late Notification of ITR Forms Increased Backend Pressure
In contrast to earlier years when ITR forms were notified in early April, the forms for AY 2025–26 were released only in mid-May. This delay has had a cascading effect on the preparation and testing of the e-filing utilities.
With compressed timelines, developers have had less time to incorporate amendments related to capital gains, the updated Section 87A rebate logic, and integration with systems such as the AIS/TIS, PAN linkage platforms, and TDS databases.
Rushing the deployment in such a situation could compromise the reliability of the utility, potentially resulting in unstable software and tax calculation errors.
3. Refund Interest Management Under Section 244A
The Income Tax Department must pay interest on delayed refunds under Section 244A of the Income Tax Act. If large volumes of refund-seeking taxpayers file early, this results in:
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Higher interest outflow from the Consolidated Fund of India,
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Overcrowding of refund processing queues in Q1 of FY 2025–26, and
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An administrative burden on the Central Processing Centre (CPC) at a time when system updates are still being rolled out.
Delaying the utility release and refund processing is therefore a fiscally prudent move to manage government liabilities and avoid premature disbursements based on potentially inaccurate return filings.
4. Caution Triggered by Section 87A Rebate Errors in the Previous Year
In the previous assessment year, numerous taxpayers using the new tax regime claimed the full Section 87A rebate without realizing that capital gains under Section 111A or 112A are excluded from the rebate calculation.
This led to:
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Returns being marked defective,
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The issuance of notices and advisories,
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Taxpayers being required to revise their returns, and
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In some cases, loss of the rebate altogether.
These incidents created a trust deficit and highlighted the need for strong pre-validation logic in the utility before allowing filings. The department now appears to be prioritizing accurate implementation of such rebate-related rules, reducing the risk of misclaims.
5. Essential Forms and Data Are Not Finalized Before 15th June
Early filing may be tempting, but key tax-related documents typically become available only after mid-June:
| Form | Purpose | Availability Timeline |
|---|---|---|
| Form 16 | Salary TDS certificate and income details | On or before 15th June |
| Form 26AS | TDS/TCS and advance tax summary | Updated after 31st May |
| AIS/TIS | Annual Information and Taxpayer Summary | Substantially refreshed by mid-June |
6. Increased Technical Complexity in Utility Development
The current ITR system is no longer a static Excel or PDF-based format. It is built on a dynamic, JSON-based architecture with numerous integrated checks and validations. Some of the major changes in this year’s utility include:
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Dynamic switching between old and new tax regimes,
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Automated prefill of income and tax details from the AIS, Form 26AS, and employer systems,
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Enhanced logic for capital gains bifurcation,
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Updated validations for Section 115BAC provisions.
The extensive coordination required between data sources, prefill logic, validation rules, and user interface necessitates rigorous testing and quality assurance. The delay is thus reflective of a more thorough approach rather than administrative inefficiency.
Final Thoughts: Strategy Over Speed
A return filed in haste, without proper reconciliation and validation, often becomes a return that needs to be filed again.
Taxpayers who wait for complete data availability and a stable utility environment are more likely to file accurate returns, avoid notices or revisions, and ensure quicker refunds without discrepancies. From both a compliance and financial standpoint, patience is proving to be a strategic virtue this year.
Begin your tax preparation process now by gathering documents, reviewing AIS and TIS data, and organizing capital gain statements. However, defer actual submission until after 15th June 2025, when the system is fully updated, and all necessary information is accessible.
Doing so will result in a smoother, more accurate, and hassle-free filing experience for Assessment Year 2025–26.
