Punjab Extends Tax Settlement Deadline to March 2026 for Traders & Industry

State Finance Minister Harpal Cheema gave the formal approval for this extension following representations from various stakeholders, including the GST Practitioners Association (GSTPA) Punjab.

The decision comes in direct response to the participation seen so far, with the department recording 6,348 applications to date. The state government acknowledged that many taxpayers faced a heavy statutory compliance burden during the final months of 2025, which saw overlapping deadlines for various tax filings.

Furthermore, practical challenges such as the pending service of VAT assessment orders had made it difficult for many eligible businesses to accurately determine their liabilities before the original December deadline.

The OTS Scheme -- 2025, which initially launched on October 1, remains one of the state's most taxpayer-friendly initiatives. It is specifically aimed at reducing legacy litigation and unlocking revenue for the state by offering substantial relief.

Depending on the specific demand amount, taxpayers can avail themselves of up to a 100 per cent waiver on interest and penalties, alongside significant waivers on the principal tax amount.

Minister Cheema said that this extension would provide a golden chance for genuine taxpayers to settle long-pending disputes under the pre-GST Acts, including VAT and central sales tax, without procedural stress.

The Minister further added, "Our government is committed to fostering a pro-business environment. By extending this deadline to March 31, 2026, we are ensuring that no genuine taxpayer is left behind due to administrative or timing hurdles."

He urged all eligible businesses and rice millers to utilise this final window to clear their arrears and start the new financial year with a clean slate.

"After the new deadline of March 31, the department will initiate strict recovery proceedings against defaulters who fail to opt for this settlement," said Minister Cheema.

- IANS