Why the tax department did not extend return filing deadlines any further

The tax department stated that any further extension would affect the collection of revenue

January 19, 2021 / 10:07 AM IST

The last date for filing income-tax returns for financial year 2019-20 (or assessment year 2020-21) is gone. That was January 10, 2021. The government is not going to extend this deadline now. If you missed the deadline, you can still file your tax returns after paying a penalty.

But after three extensions, did you know why the government did not postpone the deadline another time? In its response to a petition filed by the All-India Gujarat Federation of Tax Consultants in the Gujarat High Court, the Central Board of Direct Taxes (CBDT) said that it had been proactively giving relaxation on the ITR filing deadline. It said any more relaxation was not feasible.

More returns filed this year than in the past

As per the data shared by the CBDT, the number of returns filed this year (5.95 crore tax returns as on January 10, 2021) has already exceeded that of last year (up to August 31 2019; 5.61 crore tax returns).

Besides, CBDT adds that the returns could be filed beyond the due date by paying a late fee. And above all, the government needs revenue in these COVID-19 times, which has severely hit economic activities and revenue collections.

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"Any further extension would adversely affect the return filing discipline and shall also cause injustice to those who have taken pains to file the return before the due date," CBDT added.

The tax department also argued that any further extension would also postpone the collection of revenue, thereby hampering the efforts of the government in providing relief to the poor during COVID times. It also stressed that filing of tax returns/audit reports are obligations of assessees and cannot be delayed indefinitely. Many functions of the tax department start only after the filing of the returns by the assessee.

CBDT said filing of tax returns by the assessee also results in collection of taxes either through payment of self-assessment tax by the assessee or by the subsequent collection by the department after processing or assessment of the return.

Other countries haven’t extended deadlines beyond January

The CBDT also elaborated on global practices; the deadlines prevalent in other countries, the extensions they gave and the finality of the last extension.

For instance, and as per CBDT’s response, the UK did not give any extension beyond its original income-tax returns deadline of January 10, 2021. The US extended its deadline to October 15, 2020 (original due date is April 15, 2020) and nothing more. It also cited the examples of other countries such as Australia and South Africa where further extensions were not given by their governments to their taxpayers.

Citing examples of these countries, the CBDT said the Government of India has been "very empathetic" to the needs of the taxpayers as compared to various other nations. It argued that sufficient time has already been given to taxpayers to file their returns and a large number of taxpayers have already done so.

What should you do?

If you missed the due date, do not panic. The ITR can still be filed till March 31, 2021, with a late fee.

Also read: Missed the income tax return deadline? Here’s how you can still file it

It’s always best to pay your income taxes and file your returns on time.  If you do not require any audit report to be submitted, all it takes is 10 minutes of your time to e-file the tax return.

Also read: The Moneycontrol Tax filing Guide
Ashwini Kumar Sharma
first published: Jan 19, 2021 10:07 am

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