India Budget 2026 Brings ITR Deadline Clarity: July 31 Deadline for ITR-1, ITR-2

Budget 2026 speech Budget 2026 speech

• ITR-1 and ITR-2 filing deadline remains July 31 for individuals
• Non-audit taxpayers can file returns by August 31 under new proposals
• Revised returns allowed until March 31 with a nominal fee

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Finance Minister Nirmala Sitharaman on Saturday proposed that the deadline for filing income-tax returns under ITR-1 and ITR-2 will continue to be July 31, providing clarity and continuity for individual taxpayers under Budget 2026.

Announcing a set of compliance-related measures, Sitharaman said the government does not intend to alter the existing July 31 timeline for salaried individuals and other non-business taxpayers filing ITR-1 and ITR-2. At the same time, the Budget proposes additional flexibility for other categories of taxpayers and targeted simplification in cross-border transactions.

As per the proposals, non-audit cases such as certain businesses and trusts will now be allowed to file their returns up to August 31, extending the compliance window beyond July. The move is aimed at easing pressure on smaller entities that often struggle with tight filing timelines.

In another significant announcement, Sitharaman said taxpayers will be given more time to revise their income-tax returns. Under the proposal, revised returns can be filed up to March 31, subject to payment of a nominal fee. This is expected to help individuals correct genuine errors or omissions without facing harsher penalties.

Key ITR deadlines proposed under Budget 2026

• July 31: Individuals filing ITR-1 and ITR-2
• August 31: Non-audit taxpayers, including businesses and trusts
• March 31: Revised returns, subject to a nominal fee

The Budget also addresses compliance issues in real estate transactions involving non-residents. The finance minister proposed shifting the responsibility of tax deducted at source (TDS) compliance in cases of immovable property purchases from non-residents to resident buyers. This will be enabled through a PAN-based challan system, eliminating the need for buyers to obtain a tax deduction and collection account number (TAN).

Additionally, Sitharaman announced a one-time six-month foreign asset disclosure window for small taxpayers. This scheme is targeted at individuals such as students, young professionals, technology employees and relocated NRIs who may have inadvertently failed to disclose overseas assets. The disclosure window is intended to encourage voluntary compliance without triggering penal consequences.

The proposed changes are expected to impact sectors such as tax and compliance technology, real estate transactions, NRI and remittance services, and wealth management and tax advisory firms.