Why ITR filing deadline for FY 2020-21 may be extended beyond December 31, 2021 for individuals

The last date of filing income tax return (ITR) for FY 2020-21 is December 31, 2021. This deadline has already been extended twice – first from the usual deadline of July 31 to September 30, 2021, and then to the current deadline of December 31, 2021. However, chartered accountants and tax experts feel that there is a case for further extension of the ITR filing deadline for individuals (whose accounts are not required to be audited).

Here are the reasons why.

Compared to last year, i.e., FY2019-20, fewer number of taxpayers have filed their ITR this year in FY2020-21. As per a tweet from the Income Tax Department’s official Twitter handle on January 11, 2021, for FY 2019-20 more than 5.95 crore ITRs were filed (January 10, 2021 was the last date to file ITR for FY2019-20). However, as per the data till December 15, 2021, a little more than 3.59 crore ITRs have been filed. Thus, 2.36 crore ITRs are yet to be filed with less than 15 days left for the December 31, 2021 deadline.

With less than 15 days to go, it might not be possible for rest of the individuals to file their tax returns considering the many glitches that are still being reported on the newly launched income tax portal. It is yet to be seen whether the newly launched e-filing income tax portal can handle the load of many individuals filing their ITRs simultaneously within this short span of time.

Further, last year too, the government extended the last date of ITR filing thrice – first from July 31 to November 30, then to December 31 and lastly again to January 10, 2021, for FY 2019-20. The extension happened even though the old tax filing portal was being used and neither was there a scare of new Covid-19 variants at that time.

For the reasons above, the government may consider extending the deadline of ITR filing very close to the current deadline of December 31, 2021. ET Wealth Online reached out to three tax experts to ask them why they think the ITR filing deadline for individuals should be extended from December 31, 2021. Here’s what they had to say:

Tapati Ghose, Partner, Deloitte India says, “The extended date for filing of returns for individual taxpayers not covered under tax audit is 31 December 2021. Several challenges still remain in the new JSON utility which pose a challenge for individuals to file the tax return within this due date. For instance, there needs to be a quick resolution on errors in the utility related to computation of eligible donation, loss on house property under the simplified tax regime. There are operational challenges as well. For instances, the e-filing portal is too slow, filing of Form 67 as required for claim of foreign tax credit and resetting the password is still not possible in the absence of an Indian mobile number or net banking. Further, the AIS and TIS have been made available recently giving very little time for taxpayers review prior to 31 December. As taxpayers are encouraged to review the information in these forms before filing the returns, an extension of the due date is appreciated.”

Abhishek Soni, CEO, Tax2Win.in, an ITR filing website says, “At present, around 50% people have been able to file their tax returns compared to last year. Hence, more than 3.5 crore tax returns are yet to be filed in the next 15 days, which is a very huge number. Further, the income tax website is also altogether new this year with new things like pre-fill data, Annual Information Statement (AIS), Taxpayer Information Summary (TIS) etc. are introduced for the first time. Considering all the factors and scenario, we believe that the government will take an informed decision in the next 5 to 10 days.”

Dr Suresh Surana, Founder, RSM India says, “From the financial year 2020-21 (i.e. for the year ended March 2021), the Income Tax Department has rolled out the Annual Information Statement (AIS) which captures extensive financial data of the taxpayer. As such, it becomes important for the taxpayer to not only reconcile their income and reporting requirements with the Form 26AS but also to ensure that they have duly reviewed their reportable transactions / income which is appearing in the AIS. It is notable that AIS database has been recently made available for the Financial Year 2020-21 and has led to an additional level of review which the taxpayer needs to do before filing their tax return. AIS provides detailed information such as interest on bank accounts, transactions in securities, mutual funds, foreign remittances, details of deposits, etc. Considering that there was a delay on the part of the income tax department in providing the AIS data on the new income tax portal, it becomes a necessity that the taxpayers are granted adequate additional time to pursue the same and ensure that the returns filed by them are complete in terms of reporting of income and disclosure requirements.”