ITR Filing Deadline should be Permanently Extended: Salaried Persons get only 45 days to File Returns

The deadline for filing Income Tax Returns (ITR) for the year 2023-24 is July 31, 2024. For those taxpayers whose accounts do not require auditing such as salaried individuals and certain self-employed professionals, this deadline is for them. The Income Tax Department releases ITR forms at the start of the financial year to give taxpayers ample of time to file returns. Many salaried individuals face challenges starting the ITR filing process due to the delayed availability of crucial TDS certificates which are Form 16 and Form 16A.

Current Situation: A Tight Schedule

TDS certificates are usually issued by June 15. This is the last date for deductors to provide them. Taxpayers then have only 45 days and they need to file their ITRs within this time limit. This situation creates a strong case and highlights the necessity of permanently extending the deadline of ITR for certain taxpayer categories that particularly benefit from such measures.

AIS and Form 26AS Updates

The Annual Information Statement (AIS) and Form 26AS are essential documents for taxpayers. AIS provides a summary of income information while Form 26AS acts as a tax passbook. It shows tax deducted and deposited against the taxpayer’s PAN. Both documents are updated by May 31 each year.

This is because the income tax laws require tax deductors and collectors (mainly companies/banks/financial institutions) to file the Statement of Financial Transactions (for AIS) and TDS return (for Form 26AS) by May 31. These entities are required to file their SFT and TDS returns with the income tax department.

Timing for TDS Certificates

Form 16 and Form 16A are mainly issued by June 15. This change happened after the Central Board of Direct Taxes (CBDT) extended the deadline for filing TDS returns from May 15 to May 31. As a result issuance of these forms was pushed to June 15. This left taxpayers with less time, less time to file their ITRs. Form 16 is issued by employers and it shows the total salary paid and also tax deducted in a financial year. Form 16A is issued by banks and financial institutions. It covers TDS on interest dividends and other incomes.

Challenges Faced by Taxpayers

Many taxpayers especially salaried ones, heavily rely on TDS certificates from employers for filing their ITRs. Collecting and using necessary documents can be time-consuming. If an individual changes jobs during the year, they need to consider income from both employers. When filing a return, they must also calculate eligible tax exemptions and deductions. Despite the requirement for banks and post offices to issue Form 16A by June 15.

To cover all these activities, a lot of time of taxpayers is consumed and then whatever time is left with them, they file their ITRs, on top of that if the return filing portal does not work properly or shows glitches then a huge load is put on the taxpayers.

Collecting Additional Documents

To file ITR individuals need various documents such as:

• Capital Gains Statements – This is necessary if they sell equity shares or mutual funds.
• Interest Certificates are for interest earned on Sovereign Gold Bonds, floating rate bonds and small savings schemes. They can often be downloaded through net banking.
• Salary Slips -Bank Statements are used if TDS certificates are unavailable.

Switching Tax Regimes

Some taxpayers may wish to change their tax regime while filing ITR. However, individuals can choose between old and new tax regimes. Switching requires manual calculation of income. Eligible deductions also need to be considered and proof may be necessary when ITR is processed.

Expert Opinions on Extending the Deadline

Experts believe extending the deadline would give relief to taxpayers, three months from the last date of issuing Form 16/16A would be an ideal deadline.

It highlights most taxpayers need more time to compile details of other income and gather investment proofs. Select the correct form and complete the return utility. Extending the deadline by 31 days to August 31 would significantly ease pressure on taxpayers.

Given the tight timeline and challenges faced by salaried individuals and other non-audit taxpayers, extending the ITR filing deadline beyond July 31 is practical and it’s a necessary step. A permanent extension would provide taxpayers enough time to collect all required documents and would ensure correct reporting. It helps taxpayers to free themselves from the stress of a rushed filing process and will result in an efficient tax filing.