Maharashtra Tax Arrears Settlement Scheme Gets Key Amendments: Deadline Pushed to 31st March 2026
The Government of Maharashtra has enacted the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee (Amendment and Validation) Act, 2026 (Maharashtra Act No. II of 2026), which was officially published in the Maharashtra Government Gazette (Extraordinary) on 10th March 2026, following the Governor's formal assent. This legislative development carries significant implications for businesses and assessees who have pending tax disputes under various State tax laws and were either unaware of or unable to meet the earlier deadline.
This amendment strengthens and expands the operational framework of the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2025 — the principal legislation — by addressing procedural gaps, extending timelines, and introducing validation provisions that bring legal certainty to payments already made during the transition period.
Background: Why Was the Amendment Necessary?
The original settlement scheme under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2025 was designed to offer assessees a structured mechanism for resolving long-pending disputes relating to tax arrears, interest, penalties, and late fees. However, several assessees were unable to take full advantage of the scheme within the originally prescribed timeframe. Additionally, practical challenges arose in cases involving multiple appeals emanating from the same statutory order, and there was ambiguity around the validity of payments made after the scheme's original closing date.
To resolve all these concerns in a comprehensive manner, Maharashtra Act No. II of 2026 was brought into force, making three critical interventions:
- Extension of the filing deadline
- Clarification on issue-wise withdrawal of appeals
- Validation of payments made between 31st December 2025 and the commencement of the Amendment Act
Key Amendments Introduced by Maharashtra Act No. II of 2026
1. Extension of Deadline Under Section 10
The most immediately impactful change introduced by this amendment concerns Section 10 of the principal Act. The Table in Section 10, column (4), originally carried the date "31st December 2025" as the last date for availing the settlement scheme. Through this amendment, that date has been substituted with "31st March 2026".
This three-month extension gives assessees — who had pending arrears of tax, interest, penalty, or late fee — additional breathing room to file their applications and settle their dues under the scheme. For businesses that were navigating procedural or financial constraints, this extension is a practical relief measure.
Note: Assessees who missed the 31st December 2025 deadline can now approach the designated authority and complete the settlement process on or before 31st March 2026.