Budget Alert 2026: Extension for Revised Tax Returns
The Finance Bill, 2026 has introduced a welcome move for taxpayers, offering more breathing room to correct errors in their filings. Here is a breakdown of the proposed changes to the timeline for filing Revised Income-Tax Returns.
Key Proposed Amendments
The Bill seeks to align the timelines across both the current and legacy tax frameworks:
• Extended Deadline: The time limit for filing a revised return is proposed to increase from 9 months to 12 months from the end of the relevant tax year.
• Section 263(5) [2025 Act]: This new provision will reflect the 12-month window for those governed by the updated Income-tax Act.
• Section 139(5) [1961 Act]: To maintain consistency, the Bill proposes a corresponding amendment to the legacy 1961 Act, ensuring all taxpayers benefit from the extra three months.
The New “Nominal Fee”
While the window is longer, it now comes with a small cost. The Bill proposes the insertion of Section 234I in the 1961 Act (and its equivalent in the 2025 Act), which mandates a nominal fee for filing these revised returns within the extended period.
