Instagram confirmed in a support documents that live filters won’t be coming back:
As of the current release (v3.1), Instagram does not support live filters on the iPhone 5. Going forward, live filters will be phased out as we work to improve the Instagram experience for all users.
- How to get live filters back in Instagram on the iPhone 5:
- open the app and select an image form your Photo Library
- tap the Choose button
- now tap the Red X to undo your selection (see the screenshot above)
- tap the Cancel button on the top right to exit your library
- you will now see all live filters below
The only disadvantage is that you’ll need to repeat the above steps each time you want to access your live filters.