ITR filing due date nearing: How severe are penalties for non-compliance, and why are some seeking a deadline extension?

India’s middle-class taxpayers are facing an anxious countdown as the final stretch of income tax filing turns into a test of endurance. Chartered accountants and trade bodies warn that lakhs of honest taxpayers risk slipping into non-compliance, not due to personal delay, but because of late-released forms, a glitchy portal, and even natural disasters.

As of September 8, more than 5 crore income tax returns (ITRs) have been filed for Assessment Year 2025–26, with 4.72 crore verified. Yet, professionals insist these figures mask the struggle many are going through.

System delays and broken utilities

Tax professionals highlight that crucial ITR utilities—Forms 5, 6, and 7—were released only between August 8 and 21. That left barely six weeks for audit-heavy cases to be completed. Organisations such as the Federation of Karnataka Chambers of Commerce & Industry (FKCCI) argue that “system delays” are unfairly punishing compliant taxpayers.

The Chartered Accountants Association, Surat (CAAS), accused the tax department of “administrative indifference,” pointing to repeated breakdowns of the online filing system. It added that widespread floods had shut down offices, disrupted power, and slowed internet connectivity in several states, further hampering the filing process.

Festive season pressure

The overlap of the filing rush with the festive season has only made matters worse. Tax professionals say families are juggling compliance with celebrations, often working late nights and holidays to meet deadlines. CAAS has demanded “time compensation” for days lost to floods and system outages, instead of a simple extension.

Penalty for late filing

Failure to file on time carries significant financial consequences. A standard late fee of Rs 5,000 applies, while those with an annual income below Rs 5 lakh face a reduced fee of Rs 1,000. In addition, any unpaid tax attracts a monthly interest of 1%.

Rising compliance, but mounting distrust

The Central Board of Direct Taxes (CBDT) remains silent on calls for another extension. This has deepened unease among taxpayers, even though compliance levels are rising steadily. Last year alone, filings hit a record 7.28 crore, reflecting a 7.5% growth from the previous year.

The final word

For now, the tax department has kept to its revised deadline. That means all non-audit taxpayers—including most individuals, salaried employees, pensioners, and small businesses under presumptive schemes—must complete their filings by September 15, 2025.