It has also allowed fertiliser companies and firms to purchase Point of Sale (PoS) devices till September, earlier they had to complete the preparations by June 1.
The government bears about Rs 70,000 crore annually as fertiliser subsidy to provide cheaper nutrients to farmers.
"The deadline of the national rollout of DBT for fertiliser subsidies is March 31, 2018," Minister of State for Chemicals and Fertilisers Mansukh L Mandaviya said in a written reply to the Rajya Sabha.
He informed that "all preparation including the deployment of PoS machines are continuing as per national rollout action plan".
A pilot project to introduce DBT in fertiliser sector has been undertaken in 16 districts.
In February, the minister had said in a written reply to the Rajya Sabha that DBT being implemented in case of fertiliser subsidy payment is slightly different from the normal DBT implemented in LPG subsidy.
Under DBT in the fertiliser sector, Mandaviya had said, the subsidy will be released to the companies instead of the beneficiaries, after sale by the retailers.
Mandaviya had said that normal DBT like in LPG cannot be introduced in the fertiliser sector as the beneficiaries and their entitlement is not clearly defined.
"Multiple subsidised products, urea and 21 grades of Phosphate potassic fertilisers have different subsidy rates. The subsidy rate in respect of urea varies from company to company due to different production processes, energy efficiencies of plants, vintage etc," he had said.
Stating that the amount of subsidy in some fertilisers, particularly urea, is more than double the MRP, the minister had said that it would be a huge financial burden on farmers to pay the MRP and subsidy upfront and then receive the subsidy amount.