By Surekha Ahuja | CA S Ahuja & Co | www.casahuja.com
India’s tax compliance season for AY 2025–26 is unfolding with both promise and pressure. On one hand, the Income Tax Department has launched the ‘Tax Assist’ facility, intended to support taxpayers with AI-driven guidance and human-assisted help. On the other, the persistent delay in releasing ITR-2 and ITR-3 utilities—even after the recent extension of the non-audit due date to 15 September 2025—has left a large segment of taxpayers in limbo, particularly those with capital gains, partnership income, or foreign disclosures.
This divergence between supportive initiatives and system readiness is creating mounting challenges for taxpayers and professionals alike—especially as audit deadlines loom.
What’s Working: The Tax Assist Facility
The introduction of ‘Tax Assist’ marks a positive step toward accessible and inclusive digital tax services. It is particularly useful for:
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First-time or inexperienced filers
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Senior citizens
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Taxpayers in rural or digitally underserved regions
Key features of the initiative include:
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AI-assisted form selection and filing guidance
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Help with e-verification, password issues, and refund tracking
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Real-time assistance via phone or chat
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Support through designated facilitation centres in select locations
This initiative is a meaningful attempt to reduce procedural anxiety and support voluntary compliance, especially for those outside the traditional professional ecosystem.
However, the effectiveness of such assistance depends fundamentally on the availability of functional filing tools. That’s where current operational gaps become visible.
What’s Missing: Delayed ITR Utilities
As of mid-July 2025, the utilities for ITR-2 and ITR-3 remain unavailable—despite the final schemas being notified in May. These forms are required by:
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Individuals with capital gains from shares, mutual funds, or property
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HUFs with diversified investment income
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Directors and partners in firms or LLPs
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Taxpayers with foreign assets or income
While ITR-1 and ITR-4 were released earlier, the more complex ITRs that apply to higher-income and investment-based taxpayers are still pending—leaving a large portion of filings effectively stalled, despite taxpayers and consultants being fully prepared.
Deadline Extension: Relief for Non-Audit Filers, but Audit Cases Remain Pressured
The CBDT’s extension of the non-audit return filing deadline to 15 September 2025 is a welcome and necessary step in light of systemic delays. However, the deadline for audit cases under Section 44AB remains at 30 September 2025, compressing the professional workflow into just two weeks for one of the most detailed compliance tasks in the tax calendar.
Audit filings require:
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Book finalisation and ledger review
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Clause-by-clause Form 3CD disclosures
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Reconciliation of GST, TDS, and financial statements
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Final approval from management or promoters
Given the quantum and complexity of this work, the absence of a corresponding extension for audit returns places disproportionate pressure on professionals—especially as they simultaneously handle high volumes of capital gains and ITR-3 cases.
Capital Gains Reporting: Reformed but Resource-Intensive
The revised capital gains schedules introduced for AY 2025–26 are a significant step toward better data granularity. Taxpayers are now required to disclose:
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Asset-wise capital gain classifications
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Indexed cost of acquisition with year-wise breakup
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PANs of buyers and co-owners for immovable property
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Detailed data on improvements, exemptions, and deductions
These are positive reforms in principle, but they require considerable preparatory effort. Much of that effort is either delayed or duplicated due to the unavailability of the relevant utilities.
Progress with Operational Gaps
There is no question that the intent behind the Tax Assist initiative and capital gains reform is progressive. However, intent must be matched by execution. Without timely access to ITR utilities and coordinated compliance timelines, even the most well-designed support mechanisms remain underutilised.
| Positive Developments | Key Challenges Still Unresolved |
|---|---|
| Launch of AI-based Tax Assist | ITR-2 and ITR-3 utilities yet to be released |
| Support for first-time/rural taxpayers | No deadline relief for audit returns |
| Capital gains reporting reforms | Significantly increased documentation and prep burden |
| Issue | Suggested Measures |
|---|---|
| Delays in ITR-2 and ITR-3 utilities | Release without further delay, after necessary testing |
| Overlap between ITR filing and audit prep | Extend audit filing deadline to 31 October 2025 |
| Absence of system-wide visibility | Publish real-time utility release updates and roadmaps |
| Support without tool availability | Align Tax Assist rollout with form accessibility |
Planning Ahead Despite Uncertainty
In the interim, taxpayers and professionals are advised to begin backend preparations now, even without active utilities:
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Initiate Form 3CD drafting and book closure for audit clients
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Prepare capital gains schedules offline to avoid last-minute rush
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Communicate with clients to collect necessary documentation in August
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Use the Tax Assist facility where appropriate, but monitor form readiness closely
Real Support Requires System Readiness
The launch of Tax Assist reflects the government’s commitment to a more accessible and digitally driven tax experience. However, the benefits of AI-enabled assistance can only be fully realised when accompanied by functional utilities, realistic deadlines, and platform stability.
True compliance support requires more than guidance—it requires preparedness. Without timely tools and proportionate timelines, even the best support initiatives risk falling short of their intended impact.
