ITR Filing 2025: CBDT has extended the deadline for ITR filing to 15 September 2025. This may increase the interest on tax refund, but this benefit is dependent on certain conditions. Know when and how interest is received, and is delay in filing return beneficial for interest?
ITR Filing 2025: The Central Board of Direct Taxes (CBDT) has extended the deadline for filing income tax returns (ITR) for the financial year 2024-25 (assessment year 2025-26). Now it will be 15 September 2025 instead of 31 July. This means that taxpayers will get 46 extra days to file returns. At the same time, taxpayers who are to get income tax refund can also get additional benefit in the form of interest. However, this benefit will depend on certain conditions.
Why was the deadline for filing ITR extended?
The most important reason for extending the deadline to file Income Tax Return (ITR Filing 2025) is the many changes made in the ITR forms. Due to this, taxpayers are taking more time to understand the new system and fill the form correctly. Also, the complete information of TDS also came in early June, which gave people less time to prepare the return. The tax department does not want people to make mistakes or file returns without complete information, so they have been given 46 more days so that they can file ITR comfortably and correctly.
Vivek Jalan, partner at Tax Connect Advisory Services LLP, says that the deadline for filing Income Tax Return (ITR) on 31 July every year becomes a big difficulty for taxpayers. Changes are made in the format of ITR every year, which takes time to issue the related utilities.
According to Jalan, ‘TDS/TCS credit is usually available only till June 15, which effectively gives taxpayers only one and a half months to file returns. In such a situation, extending the deadline to September 15 this year is a very good step.’
Who gets interest on tax refund?
If a taxpayer pays more tax than his actual liability, then there is a provision to give him interest along with the refund. Be it any tax. Such as Tax Deduction at Source (TDS), Tax Collection at Source (TCS), or Advance Tax. Under Section 244A of the Income Tax Act, the taxpayer gets interest at the rate of 0.5% per month from the tax department.
However, this interest will be available only when the refund amount is more than 10% of the total tax payment. Now suppose you paid a total tax of ₹50,000 in the whole year and now you are getting a refund of ₹4,000. Since ₹4,000 is only 8% of your total tax amount of ₹50,000, you will not get any interest on this refund.
But if the refund amount was ₹6,000, which is 12% of ₹50,000, then in this case you will get interest on that ₹6,000. It is also worth noting that the interest on the refund will be added to the income of the next financial year as ‘income from other sources’ as per the Income Tax Act and will be taxed.
When and how will the interest be paid?
The date of filing ITR and processing of refund affects when the taxpayer will get interest. If the return is filed on or before 15 September 2025 (new deadline), interest will be calculated from 1 April 2025 till the refund is issued. On the other hand, if the return is filed late, interest will be available only from the date of filing to the date of refund.
How much interest will be given on refund?
Now suppose you have to get a refund of ₹ 35,000. If you file your return on September 10, 2025 and the refund is issued on September 30, then the interest will be for 6 months from April 1 to September 30:
₹35,000 × 0.005 × 6 = ₹1,050
But, if the return is filed on July 15, 2025 and the refund comes on July 31, then the interest will be for 4 months:
₹35,000 × 0.005 × 4 = ₹700
Should ITR filing be postponed just for the sake of interest?
According to tax experts, it is not wise to deliberately delay return filing, as the amount of additional interest is nominal.
On the contrary, filing returns early not only leads to early refund, but also opens the option of timely revision for free, if necessary. If you get the refund early, you can use it elsewhere and earn more than the interest you get from the tax department.
How much will the burden on the Income Tax Department increase?
In the financial year 2024-25, refunds of ₹ 1.9 lakh crore were issued to individuals and non-corporate taxpayers like HUF till March 31, 2025. In the previous year i.e. FY 2023-24, this figure was ₹ 1.57 lakh crore.
Increasing the deadline for ITR filing may increase interest payments, but the tax department has already included this additional expenditure in its assessment. However, it is important to remember that interest will be paid only in cases where the refund claim is found to be valid.
