Extension of due date for filing Income Tax Returns F.Y 2020-21 requested by Various Taxation Associations

Several chartered accountants’ groups, Taxation Associations, Tax Bar Associations of the Various States & Various business organizations have petitioned the finance ministry to extend the deadline for filing income tax returns (ITR) for the assessment year (AY) 2021-22. (that is, financial year 2020-21).

Due to the Coronavirus (COVID-19) epidemic, the Central Board of Direct Taxes (CBDT) had already extended the ITR-filing deadlines for certain categories of taxpayers on September 9. The deadline has been pushed back from July 31, 2021 to December 31, 2021 for individuals and Hindu Undivided Families (HUF), among others. This applies to taxpayers who are not required to have their books audited.

Call for extension due to new portal and AIS problems

This proposal has the support of some tax professionals. “Due to the epidemic, the tax authorities granted an extension until May 31, 2021 for the financial year 2019-2020 (AY 2020-21).” However, in the fiscal year 2020-2021 (AY 2021-22), taxpayers had difficulties in accessing the new income-tax return-filing facility, which was not available till August/September 2021,” said Sudhakar Sethuraman, Partner, Deloitte India.

Another stumbling block is the newly implemented annual information statement (AIS). “For taxpayers, reconciling AIS with tax calculations could be time-consuming. In the event of a discrepancy between AIS and actual reported revenue, the department has said that no requests will be issued for the current year. “However, taxpayers are generally attempting to reconcile reported income with the AIS in order to avoid future inquiries,” says Sandeep Sehgal, Director-Tax and Regulatory, AKM Global, a tax and regulatory consulting firm.

Others, on the other hand, believe that the tax-return filing facility is currently operational and that any extensions should be limited to individuals.

In any case, experts advise against waiting until the last minute or expecting an extension and instead filing the ITR as soon as possible.

“It is critical that taxpayers do not postpone filing their tax returns until the last possible moment.” Even if the government extends the deadlines, taxpayers will still be responsible for interest on any unpaid taxes. As a result, it is advisable to complete the return filing activity as soon as possible,”

Penalties apply if you file your tax return late

The extended deadline for filing ITRs for AY 2021-22 is December 31, 2021, however you have until March 31, 2022 to file a late return. A late return, on the other hand, will be subject to late-filing penalty of up to Rs 10,000 under section 234F. Aside from that, there are some other limitations. If you submit a late return, for example, you won’t be allowed to carry any losses forward. As a result, rather than relying on an extension, make sure you file your returns by December 31.