ITR filing deadline should be permanently extended beyond July 31:
Salaried get only 45 days to file tax returns
July 12, 2024
ITR filing deadline extension: The due date to file income tax return by a salaried individual is July 31, 2024 for FY 2023-24 (AY 2024-25). However, in reality salaried taxpayers get only 45 days to file their income tax return. Here are some reasons and why there is a need for permanent ITR filing deadline extension.
At times some of the interest income may not be visible in the AIS.
The deadline to file income tax return (ITR) for FY 2023-24 (AY 2024-25) is July 31, 2024. This deadline is applicable to taxpayers whose accounts are not required to be audited - such as salaried individuals, certain self-employed professionals and so on.
To provide adequate time for filing ITR, the income tax department released the ITR forms at the start of the financial year. However, many salaried individuals cannot start the ITR filing process due to non-availability of important TDS certificates such as Form 16 and Form 16A.
Usually, TDS certificates are issued by June 15 which is the last date for deductors to do so. This gives taxpayers essentially 45 days to file their income tax returns. But this situation also makes a case for a permanent extension of the last date to file ITR for certain categories of taxpayers.
Here are the reasons:
1. AIS and Form 26AS are fully updated by May 31: The income tax department displays Annual Information Statement (AIS) for each taxpayer in its e-filing portal to inform him/her about the income information it has about that person. Form 26AS is a tax passbook showing the tax deducted/collected from and deposited against a taxpayer's PAN during the financial year. Both documents are updated by May 31 of the relevant assessment year.
This is because the last date, for tax deductors and tax collectors (mostly companies/banks/financial institutions) to file the Statement of Financial Transactions (for AIS) and TDS return (for Form 26AS) is May 31, as per income tax laws. The SFT and TDS return have to be filed with the income tax department by these entities.
2. Date to receive Form 16, Form 16A: TDS certificates like Form 16, Form 16A are normally issued by the deductors (employers, mutual funds, banks, etc) after filing their TDS return. As per income tax laws, a TDS certificate must be issued within 15 days of filing the TDS return.
Remember, the Central Board of Direct Taxes (CBDT) had in 2017 extended the deadline to file a TDS return by 15 days. The notification extended the last date to file TDS returns by employers, banks and other financial institutions to May 31, from May 15. So, the last date to issue Form 16/16A became June 15, from May 31 earlier. This extension provided more time to file TDS returns but the subsequent time limit to file ITRs was not extended. If an individual gets Form 16A/16 on June 15 then he/she now has 45 days to file an ITR, from almost 60 days earlier.
Form 16 and Form 16A are essential TDS certificates for ITR filing. Form 16 is issued to an employee by an employer with details of the total salary paid and tax deducted on it in a financial year. Similarly, Form 16A is issued by banks and other financial institutions for TDS deducted on interest, dividend and other incomes.
Suresh Surana, founder, RSM India, a business consulting group, says, "Most of the taxpayers, including salaried taxpayers, rely on the TDS certificates provided by their employers for the purpose of filing their income tax returns. However, considering that the last day for filing TDS returns is May 31, the tax deductors (banks and employers) issue TDS certificates generally by June 15. As such, taxpayers would have 45 days till the due date of July 31 for furnishing their income tax returns."
However, not everyone needs TDS certificates. Certain taxpayers might not require TDS certificates if no tax is deducted from their income. Further, taxpayers can file ITRs without TDS certificates using documents such as salary slips, bank statements, Form 26AS, etc.
Surana says, "However, collecting other documents and using them to calculate gross taxable income is a time-consuming process. There could be scenarios where an individual has changed his employment and has not intimated the income from former employer to the new employer and as such, may need to consider both income from previous and current employer while filing the return. Further, an individual will be required to calculate the various tax exemptions he or she is eligible for."
Similarly, even though banks and post offices are required, under the income tax law, to issue Form 16A by June 15 in practice they usually do not do so.
3. Collecting other documents: An individual is required to collect certain other documents to file income tax returns. These include capital gains statements - if the individual has sold equity shares, equity mutual funds, debt mutual funds, etc, - from mutual funds and stockbrokers concerned.
Interest certificates from RBI for interest earned on Sovereign Gold Bonds and floating rate bonds; from post office for interest earned on small savings schemes such as Post-Office Time Deposits, Mahila Saman Scheme, Kisan Vikas Patra etc, are also required. One can download interest certificates through the net banking facility of banks for savings accounts and fixed deposits. Remember, at times some of the interest income may not be visible in the AIS. It is important for taxpayers to ensure that all the incomes are reported in ITR to avoid getting any tax notice.
4. Switching tax regime: Some taxpayers may want to switch their preferred tax regime while filing ITR.
The new tax regime is the default tax regime since April 1, 2023. It automatically becomes the basis for tax calculation if an individual does not specifically choose the old tax regime. However, income tax laws allow an individual to opt for any tax regime while filing ITR, irrespective of what was chosen earlier for TDS purpose. Those who want to switch from the new to old tax regime have to manually calculate their income under various heads, and the exemptions and deductions they can claim. The income tax department can ask for proof of these when the ITR is processed.
On the other hand, if the switch is happening from the old to new tax regime, taxpayers have to manually recalculate their income by adding incomes exempted under the old regime and removing deductions that were available in the old regime but are not available in the new tax regime.
What experts say about ITR filing deadline
Sujit Bangar, a former IRS officer and founder of ITR filing website TaxBuddy.com, says, "Form 16/16A is required to be received by June 15. Three months from the last date for issuance of Form 16/16A can be an ideal due date for filing ITR for individuals and non-audit cases. Thus, September 15 can be an ideal due date."
Other experts also agree that the deadline should be extended permanently. "As mentioned earlier from the last date for issue of Form 16 (June 15) by the employer, the employee has only 45 days to file their return (July 31) including the time period to compile details of other income, investment proofs (if not already considered in Form 16), to select the right form considering his income, fill the return utility, etc. Providing a time period of, say, 31 more days - that is, a permanent extension of the return filing timeline from July 31 to August 31 - is desirable," says Surana.
[The Economic Times]
