CBDT Could Extend The Filing Deadline Due To Delayed Release Of eITR Forms

Oct 01, 2018 | 11 months ago | Read Time: 3 minutes | By iKnowledge Team

Internal errors every year by the CBDT have been a major cause of concern. These errors create exploitable loopholes for defaulters and result in headaches for the honest during their tax planning process.

ITR Filing Deadline Due To Delayed Release Of eITR Forms - Aegon Life

Every fiscal year, the Income Tax department assesses the income earned by the taxpayers of our country. This income is then reported and recorded by the department in income tax return (ITR) forms. Each year, new ITR forms and utilities are issued by the department for taxpayers to prepare and file returns. The return forms are amended year after year to incorporate the changes issued during the Union Budget under the Income tax Act. The Central Board of Direct Taxes (CBDT) is often under scrutiny for delaying the release of the ITR forms and utilities.

The CBDT failed to provide the return filing utilities and schema despite declaring the ITR forms for the current assessment year 2018-19 on April 3, 2018. The department notified 7 ITR forms for filing of return, considering different categories of taxpayers. Even now, return filing utilities have been released and issued on April 20, 2018 and May 10, 2018 only for ITR 1 and ITR 4, respectively.

The lack of efficient filing utilities resulted in 64 million returns filed only in 4 forms – ITR 1, ITR 2, ITR 3 or ITR 4 – last year. To sum it, this amounts to roughly 96 percent of total returns filed by all taxpayers, including corporate taxpayers and trusts. These forms are provisioned to be filled by Individuals and Hindu Undivided Families (HUFs) only.

While July 31, 2018 happens to be the last date for filing of returns and electronic filing of return is compulsory for almost everyone. For people who have not been able to file their due returns, the government has extended the deadline for them to August 31, 2018. Department statistics indicate that 52.61 percent of total ITRs are filed using the Department’s utility. 122 days is the limit set by the CBDT to prepare and file your ITRs and over 40 days have already elapsed with no utilities. It does not seem possible for taxpayers to file their tax returns on time. Rule 12 of the Income-tax Rules, 1962 mandates that every taxpayer must file ITR through online mode thereby making ITR utilities critical in filing of returns electronically.

The CBDT has not released the utility for filing of returns ITR-2 and ITR-3 despite as much as one-third of the deadline passing away. Though e-filing statistics suggest that a little short of 50 percent of taxpayers use ITR-1 and ITR 4 to file returns, which means that the remaining half of the taxpaying citizens are still waiting to receive the remaining utilities for other ITR forms to finish tax planning and file their return of income.

The risk of crashing the eFiling portal of the CBDT increases with every passing day that is delaying the release of utilities, from the last minute hurry. The general tendency of taxpayers during tax planning is to file returns on the last few days always results in the crashing of the online portal. The e-filing website of the income tax department becomes inaccessible as the deadline closes in, ultimately resulting in extension of due dates.

The Finance Act, 2017 has levied a hefty late filing fee over delays in filing of returns. This time taxpayers will face mandatory late filing fees under Section 234F that could vary between Rs 1,000 to Rs. 10,000 for filing returns after the due date. The resulting rush and unnecessary fines can be credited to the CBDT.

Further, Income-tax Act, 1961 requires many taxpayers to file ITRs without waiting for the last date to dawn. In other words, provisions for filing of ITR on or before the prescribed due date is not applicable in certain cases. One such case where individuals face tax planning issues is when they intend to leave the country with no intention to return. In these cases, they are required to file ITR before leaving India, failing which they will be grounded until further notice.

The government needs to refine their tax-planning process far ahead of the release to ensure that taxpayers face no hassles when filing for their returns. Early release of ITR utilities would mean that taxpayers can avoid last minute hassles on the e-filing portal and it will not require the CBDT to allow extension in due dates to file returns.

While e-filing is one part of paying your income tax, ensure you complete your tax planning before time by using Aegon Life’s income tax calculator in order to determine the income tax requirement payable by you.

IA/Sep 2018/4420

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