Don’t delay filing of returns despite the extension in deadline

The extension notice came as a reprieve to stressed chartered accountants – who have been facing multiple snags while filing returns – a week prior to the original deadline of July 31, 2019.

Mumbai-based chartered accountant, Mehul Sheth, says, “The tax department has understood the hassle faced by the taxpayers, chartered accountants, due to changes in the ITR forms, late issuance of Form 16 due to extension in Corporate TDS Return Filing deadline to June 30, 2019. The root cause was the additional details solicitated in Form 16, for salaries of employees to plug loopholes of tax evasion. As a result, several salaried individuals have not yet received their Form 16. The government-operated Traces website – which assists people in getting From 16 and TDS details – was updated on Saturday and Sunday and was again facing issues this morning.

Last year, too, there was an extension of the deadline to August 31, 2018 (September 15, 2018 for Kerala residents); this was announced on July 28, 2018. However, the tax department didn’t wait that long this time and announced it on the eve of the Aaykar Diwas that falls on July 24, 2019, marking the day when Income Tax was introduced in 1860.

Last week chartered accountants united to voice their grievances with constant changes in the tax-filing utility and the changes in form provisions asking for additional details in the return forms with respect to long-term capital loss. The changes at the government’s end forced chartered accountants to fine-tune its internal software, sometimes rendering returns filed useless, halfway through.

Ameet Patel, tax partner at Manohar Chowdhry and Associates, says, “Though there are seemingly very few changes in the ITR forms after their introduction in May 2019, there are several changes made at the back-end linking one field to another, which is creating a hassle for individual software used by us as chartered accountants.”

Efforts at simplification

There have been tremendous efforts made to create awareness about return filing, and simplifying forms and online procedures over years.

“Off late the discipline of tax filing has been built in the tax filers and we saw some of them come to us in April with all the details. But we haven’t been able to file their returns too until now due to the technical glitches. Yesterday there were issues in NRI tax filing and today we have been seeing some bug in presumptive taxation returns. But issues should be ironed out during this week, we presume,” says Patel.

But though an extension in deadline has been announced, you should avoid being laidback, say tax experts.

Sheth suggests, “Instead of waiting for the last minute, one must get into action earlier, to ensure that all the details are correctly captured in the return forms and not missed out by either the individuals or chartered accountants. Why wait for tomorrow when you can file today?”

Though one would not have to pay the penalty of Rs 1,000-5,000 for filing returns between July 31, 2019 and August 31, 2019, there are other aspects one must ensure are in place.

“When deadline extensions are announced, you are permitted to pay the self-assessment tax too by the new deadline date of August 31, 2019. However, when it comes to the interest on advance tax, which should have been paid by March 31,2019, and has not been paid, then the additional month interest would be applicable if you wait for August 31, 2019. One has the option of calculating the advance tax amount and making the payment in July itself to avoid the additional interest, even though the tax filing can happen later within the new deadline,” clarifies Homi Mistry, partner at Deloitte India.

There are chances of changes in the new provision of long-term capital gains tax again, now that a deadline breather has been offered, suspect tax professionals.

Sheth points, “There are chances that since the deadline has been extended, the optional provision of filing equity and lined long-term capital gains tax (LTCG) without the details of scrip-wise entry and ISIN number might be requested again. It has hardly been three days since the CBDT offered taxpayers an option to either enter the scrip wise details of LTCG (in Schedule 112A and 115AD(1)(iii)) or enter aggregate value of LTCG directly in the column without entering individual scrip wise details.”