Several associations of chartered accountants and industry bodies have urged the finance ministry to extend the due date for filing of income tax returns (ITR) for the assessment year (AY) 2021-22 (that is, financial year 2020-21).
Earlier on September 9, the Central Board of Direct Taxes (CBDT) had, due to the Coronavirus (COVID-19) pandemic, extended the ITR-filing due dates for various categories of tax-payers. For individuals and Hindu Undivided Families (HUF), among others, the due date was extended from July 31, 2021 to December 31, 2021. This is applicable to taxpayers who do not have to get their books of accounts audited.
New portal, AIS hassles prompt call for extension
Several tax consultants are in favour of this move. “For the financial year 2019-2020 (AY 2020-21), the tax authorities, considering the pandemic, gave an extension till May 31, 2021. However, in case of financial year 2020-2021 (AY 2021-22), in addition to the pandemic, taxpayers also faced challenges while using the new income-tax return-filing portal, which was effectively not available until August/September 2021," said Sudhakar Sethuraman, Partner, Deloitte India.
The recently—introduced annual information statement (AIS) is another hurdle. “Reconciliation of AIS with the tax calculation could be burdensome for taxpayers. However, the department has clarified that no demands shall be issued for the current year in case of mismatch between AIS and actually reported income. However, taxpayers are generally striving to reconcile the reported income with the AIS to avoid any future enquiry,” points out Sandeep Sehgal, Director-Tax and Regulatory, AKM Global, a tax and consulting firm.
Also read: Filing your income tax returns through the new portal? Here’s a simple step-by-step guide
However, others are of the view that the tax-return filing portal is now functioning smoothly and any extension of timeline should only be limited to individuals. “Any extension of timeline for filing ITRs for individuals/non-corporate taxpayers at this juncture may further push timelines for filing ITR by corporates, which is already extended and due for filing towards almost fag end of this financial year (that is, February 15/28, 2022),” said Rakesh Nangia, Chairman, Nangia Andersen India.
Though taxpayers are still facing technical difficulties in filing the ITR in some cases, largely, the ITR filing experience has become smoother now. “Even if the timelines for filing ITR by individuals/non-corporate taxpayers are extended, such extension should not be for more than 15 days,” added Nangia.
In any case, experts suggest that one should not wait till last minute or expect an extension and instead file the ITR at the earliest.
“It is imperative that taxpayers do not wait for the last-minute decision for filing their tax returns. Even if the government extends the timelines, taxpayers will not be absolved from the interest liability on outstanding tax payable. Hence, it is advisable to complete the return filing exercise on priority,” said Sethuraman.
Belated return-filing attracts penalties
The extended date to file ITR for AY 2021-22 is December 31, 2021, but you can file a belated return till March 31, 2022. However, a belated return will attract late-filing fees of up to Rs 5,000 under section 234F. This apart, there are other restrictions too. For instance, you will not be able to carry forward any losses if you file a belated return. Therefore, ensure that you file your returns before December 31, instead of banking on an extension.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
