I believe the issue is that you are selecting "use extract." Selecting "use extract" essentially means that you are telling Tableau to use the static data contained in the extract instead of the data from the live connection (I know this is kind of confusing). In this case, you want to have a live connection to the published extract on Tableau Server. To make sure you are connected to the published data source:
1. Create a new data connection.
2. Select Tableau Server as the connection type.
3. Log in and select the desired extract.
4. Right-click old extract and select 'replace'
5. Select new extract and delete old extract.
The directions above may be extraneous if you are already connected to the published data source.
Let me know if there is anything I can clarify!
Thanks Diego. It worked perfectly. But there is a new issue now. When i had it as a static extract, the document tool 1.5 minutes to load. Now after making the source as a Tableau Server Extract the initial loading takes more than 3 minutes and the users have expected complained that this is not feasible.
Your original question has been answered so you really should mark Diego's answer as Answered. The new issues is just that, an entirely new issue. Without knowing how the extract was made (hide unused fields, optimized, etc.), how large it is, etc. we can't help much.