Last date to file Income Tax Return (ITR) is 31st December 2021 for individual ITR without audit. However, there is much possibility of due date extension due to various reasons. Top 5 reasons for need of ITR due date extension are as follows-
1. Less ITR filed till date
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.
2. New Annual Information System Form
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.
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.
3. New things launched
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. The taxpayers need time to be fully aware of all aspects.
4. Glitches in New Portal
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.
5. Last Year ITR Date Extended
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.
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