Why taxpayers need early date extension:
An Open Representation by
the Team – The Tax Talk
Smt. Nirmala Sitharaman
Hon’ble Finance Minister
Subject: – Appeal for Extension of the Due date of filing Income Tax Returns
Reference: Faith & Confidence of all the taxpayers in Modi Government
We on behalf of the taxpayers of the country express our deep regards for all your genuine efforts and action for making the system transparent, effective and accessible. We are with you for all your actions & efforts as far as all such new initiatives are concerned.
We do believe every change carries some trouble and side-effects during the initial phase of its implementation but in the long term it turns out to be better, stronger and useful for the tax-payers, tax administration & the country.
This letter of ours is just an attempt to bring to your kind consideration the support and help that is needed at this hour for making proper tax compliance easy & convenient.
Before we make a request, let us be very candid in accepting the fact that extension of date of filing Income Tax Return even after 9 months of the financial year would not be desirable as it would delay all other related activities and planning. But, the circumstances and background under which date extension is sought may just enable you to go a little easy and soft. The same are summarized as under:
First 3 Months of the Financial Year:
It may be noted that the 2nd Wave of Covid has already disturbed the working & efficiency of the common taxpayers. From March – 2021 to June 2021, almost every part of the country was affected by the Covid.
A Lot of citizens have suffered the loss of their family members and associates during this tough time. Effectively, the first 3 months of the financial year may be ignored from the 9 months period so far.
Next 4 Months of the Financial Year:
Somewhere, at the peak time of return filing activity, a new income tax portal was launched which was almost disastrous at the moment it was launched.
We appreciate your instant action by taking the meeting with Infosys wherien strong warning was given for early resolution of the glitches. Undeniably, even after your time bound instructions, the glitches are yet to find the fullest resolution.
As a result of this, the taxpayers were left with no other alternatives but to wait for its normalization. Taxpayers were unable to access even Form No. 26AS. Even the TDS /TCS returns were not filed by the deductors which was resulting in delay in reflecting the amount to the credit of the deductee. Effectively, the period of 4 months has evaporated during the process of normalization of the new income portal.
Time out of the current 8 Months of the Financial Year:
As a result of all above, out of the 8 months, around 7 months period has turned out to be a zero period for the taxpayers.
Delayed release of Schema of ITR forms:
The ITR forms and schema for ITR filing is also announced very late and has delayed the process of compliances for the taxpayers.
Annual Information Statement (AIS):
The period of last 3 months has witnessed the launching of the Annual Information Statement (AIS) at the income tax portal.
The concept of AIS at the system is very well appreciable as it is aimed at better transparency and information sharing for the taxpayers. However, the facility is made available only in the last 2 month. This new system of Annual Information Statement (AIS) & Tax information Summary (TIS) has further added to the new set of verification and compliances for the taxpayers. All these new features have made the task of verification and cross verification mandatory for the taxpayers.
Trouble persisting still now:
Now, even if the portal is normalized to a great extent as far as return filing is concerned, there are still numerous troubles which the taxpayers are facing. Few of the trouble could be summarized as under:
i. Trouble in accessing the data of earlier years.
[Old data is still not visible or cannot be downloaded]
ii. Trouble in downloading of Form No. 26AS
iii. Trouble in OTP for various validation
iv. Trouble in uploading the details & attaching the files
v. Trouble in registering the DSC
vi. Trouble in submitting the Audit report in Form No. 10B
vii. Trouble in submitting the Tax Audit report in Form No. 3CA / 3CB & 3CD
viii. Trouble in registering the legal heir
ix. Trouble in downloading the copy of the ITR after its filing
x. Trouble in e-services and other access in the features
xi. Trouble in the filing of the returns
xii. Trouble in getting the intimation u/s 143(1)(a) Intimation
xiii. Trouble in filing the rectification application u/s 154
xiv. Trouble in filing the uploading of Form No. 29B
xv. Trouble in filing & OTP while uploading Form No. 10IE
xvi. AND SO ON & SO FORTH.
Data of ITR Filed so Far & Way Forward:
The data suggests that the number of ITRs filed per day is over 4 lakh and increasing everyday as the extended due date of 31st December 2021 is approaching. The data further suggests that around 94% of the taxpayers are individuals whereas 5% are firms and companies. Rest 1% is the other categories of the taxpayers which include AOP, Trusts, etc. In short, the majority of the taxpayers will have the due dates of 31st December 2021 for filing their income tax returns. Total income tax return filed in the last fiscal was around 6.70 Cr which may be reasonably presumed to be the figures of ITR to be filed in the current fiscal as well.
Considering the ratio of 94% for individual/HUF taxpayers, around filing of 6.33 Cr of this return of Individual/HUF will be required to be completed by 31st December 2021. Taking the figures of 3 Cr of returns already filed, there are around 3.33 Cr of returns which may be required to be filed from 3rd December 2021 to 31st December 2021. It works out to an average of 11.90 Lakh returns per day including all the Sundays & Holidays. Considering the present figure of ITR filing of around 4 Lakh returns per day, the figure of 11.90 Lakh returns is almost three times the normal return filing.
Help of the Tax Professionals & Accountants:
“One of the most complicated things to understand is income tax” and the filing of income tax return requires the taxpayers to seek the help of the tax advocates, tax consultants, accountants, etc. Getting their time and support within this short period would also be another trouble for the taxpayers.