For individuals, the last date for filing income tax return (ITR), i.e., July 31 is fast approaching. If the ITR is filed after the deadline, then the individual would be required to pay late filing fees of maximum up to Rs 10,000.
This year especially there is a strong case for extension of the due date and there are many reasons for this.
Firstly, the Central Board of Direct Taxes (CBDT) has extended the deadline for employers to give Form 16 to their employees.
As per the order issued by the CBDT dated June 4, 2019, the deadline for filing TDS return by the employer was extended to June 30, 2019 from May 31, 2019. In addition to that, the deadline for issuing TDS certificates to employees, i.e., Form-16 was also extended to July 10, 2019 from June 15, 2019. This extension has left only 21 days for employees to file their tax returns using Form 16.
This deadline was extended because CBDT has revised the format for Form 16 and TDS returns, i.e., Form 24Q. Abhishek Soni, CEO, Tax2win.in, an ITR filing website says, “Many taxpayers are asking whether the due date of filing the ITR will be extended or not? Well, in our opinion, the ITR filing date should be extended. The due date for employers to issue Form 16 was extended by CBDT from June 15 to July 10 for the current year and so, to provide taxpayers with sufficient time to file their income tax returns, the return filing date should be extended.”
Shalini Jain, Tax Partner, People Advisory Services, EY India says, “It would be a welcome step if the due date of filing individual tax returns for FY 2018-19 is extended from July 31 to a later date since the employees have been provided with Form 16 only in the second week of July due to the extension of date for filing TDS returns and issuance of Form 16 by the employers.”
Second reason why deadline to file ITR needs to be extended is so that salaried individuals get enough time to get the errors in their salary certificate, i.e., Form 16 corrected.
Soni says, “In case an assessee discovers any mistake in Form 16 issued to him, he would have to communicate the same to the employer. The employer would then have to revise their TDS return and would then issue a revised Form 16. In order to provide the taxpayers with feasible time for the same and redress genuine hardships in such cases, the return filing date should be extended.”
Jain adds, “There are also cases where Form 16s have not been issued by the employers due to erroneous TDS returns filed.”
Third reason why extension of ITR filing deadline is needed is due to extensive reporting of information required in ITR forms this year. For instance, salaried individuals who are required to file their tax return using ITR-2 are required to provide detailed salary break-up. Jain says, “Given the changes in tax return forms and the additional reporting requirements introduced this year, individual taxpayers need more time to correctly report the required information which may not be easily comprehensible by them.”
Similarly, taxpayers who hold shares in unlisted companies are required to provide in their ITR, the PAN and other details such as cost of acquisition, face value of shares and so on of the unlisted companies.
Soni says, “As per the changes made in the ITR form this year, if an assessee held unlisted shares at any time during the relevant year, he/she has to provide the details of holdings of such shares in the ITR form. Among the various details required, an assessee needs to mandatorily furnish the PAN of that company. Finding out the PAN number of such unlisted company may take time in case PAN is not available with the assessee. Also, if an assessee has sold any unlisted shares during the previous year, he has to state the Fair Market Value of the shares in the ITR Form. An assessee would have to get the same from a Merchant Banker which may take some time.”
Even though the income tax return forms were notified by the CBDT on April 1, 2019, the Excel and Java utilities are still undergoing changes. As per recent updates in ITR-2 and ITR-3 on July 11, taxpayers are required to report the ISIN code, name of the shares, number of shares sold and so on in case they have sold any listed shares. However, the reporting of such information is optional as clarified by CBDT.
Jain adds, “Comprehensive reporting is required in the income tax return forms for salary, capital gains, unlisted shares and foreign assets. The tax filing utilities are still undergoing changes.”
Fourth reason why ITR filing deadline requires an extension is to avoid panic situation in case the e-filing website goes down. From FY 2018-19, it is mandatory for every taxpayer to file their income tax return online except for super senior citizens aged 80 years or above who can file ITR in paper format as well.
Chartered Accountant Naveen Wadhwa, DGM, Taxmann.com says, “As due date for filing of Income-tax return by individual taxpayers is July 31, they are left with only 21 days to furnish their return of income. As employees would start filing the Income-tax return on or after July 10, 2019, there would be a surge in return filers in the last 3 weeks of July. We have seen that every year the return filing website goes down when there is a sudden increase in traffic. Considering the recent changes and ..
Various chartered accountants associations such as Tax Bar Association from Jodhpur, Bombay Chartered Accountants’ Society (BCAS) have also appealed to CBDT Chairman and the finance minister citing reasons such as less time for salaried individuals to file ITR and on-going updation of income tax utilities.
Vaibhav Sankla, Managing Director, H&R Block India says, “It would be a bit unreasonable to expect taxpayers to get their tax filing done in just 21 days. Therefore, in my view, the extension of due date for filing the income tax returns seems only reasonable. To ensure that higher number of taxpayers file their returns sooner than later, the tax department may announce the extension only towards the end of this month. However, taxpayers should still consider filing their returns soon, and n ..
Source : PTI