With the July 31 deadline for filing income tax returns approaching, only 1.97 crore returns have been filed so far. Tax experts warn against expecting an extension this year as online portals are functioning smoothly. Missing the deadline may lead to late filing fees, interest on dues, and the loss of the ability to carry forward certain financial losses.
The race to file income tax returns for the Assessment Year 2026-27 is facing a sluggish start, raising concerns for both taxpayers and the authorities. As of July 13, 2026, the Income Tax Department has received only 1.97 crore returns. This figure is noticeably lower compared to the usual pace seen in previous years, where annual filings typically crossed the 7-crore mark. With the July 31 deadline just around the corner, this slow momentum is becoming a key point of discussion for those yet to complete their compliance.
Why an Extension Remains Unlikely
Many taxpayers often wait for the government to push back deadlines, a pattern seen in years when technical glitches or delayed form releases caused widespread trouble. However, the current situation is different. The Income Tax Department successfully released the necessary ITR forms and online utilities on time this year. Because the digital filing infrastructure is operating without major technical hurdles, tax professionals believe there is no administrative ground to justify an extension. The availability of pre-filled data in the Annual Information Statement, Form 26AS, and Form 16 has also made the process more efficient than in the past, reducing the need for extra time.
Financial Risks of Delayed Filing
Waiting until the last minute involves real financial risks. Under Section 234F of the Income Tax Act, taxpayers who miss the July 31 deadline may have to pay a late filing fee. Additionally, any outstanding tax liability will continue to attract interest charges for each month of delay. Perhaps more importantly for investors, missing the deadline results in the forfeiture of the benefit of carrying forward certain losses—such as capital losses from stock market trading or business losses—to future years. These losses could have otherwise been used to lower future tax bills.
Benefits of Early Compliance
Beyond avoiding penalties, filing early provides practical advantages for individual taxpayers. Early filers are generally prioritized for processing, which means income tax refunds are issued faster. Furthermore, by filing ahead of the crowd, taxpayers avoid the common technical congestion that often crashes the Income Tax portal during the final days of July. This extra time allows for a thorough reconciliation of income details against the Annual Information Statement, ensuring that all deductions and tax credits are accurately claimed. It also provides a window to calculate whether the new tax regime or the old tax regime results in a lower overall tax payout for the current year. The key focus for taxpayers should be gathering documents like interest certificates and capital gains statements now to avoid errors that could lead to tax notices later.