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Explained: What has forced the govt to extend tax payment deadlines again?

The Central Board of Direct Taxes (CBDT) has further extended the due dates for filing the Income Tax Returns and various reports of audit for the Assessment Year 2021-22. What are the new deadlines, and why the extension?

Citing difficulties reported by taxpayers and other stakeholders, the Central Board of Direct Taxes (CBDT) Thursday decided to further extend the due dates for filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22. The deadline for income tax returns for individuals whose accounts are not to be audited has been extended for the second time this year to December 31 from the earlier extended deadline of September 30.

What are the new deadlines?

In May, the Finance Ministry had extended the compliance deadlines stating that the extension of time limits for certain tax compliances is being given to provide relief to taxpayers in view of the severe pandemic. The due date of filing income tax returns for Assessment Year 2021-22 for individuals was extended by two months from July 31 to September 30. The CBDT had also extended the ITR filing deadline for companies by a month till November 30.

On Thursday, the Income Tax Department further extended these deadlines. This comes after taxpayers raised concerns about difficulties in filing returns on the new income tax portal, which has been marred by glitches since its launch on June 7.

The due date for ITRs for individuals whose accounts are not to be audited has been extended to December 31 from the earlier extended deadline of September 30, while that for companies has been extended to February 15, 2022 from the earlier extended deadline of November 30.

The due date of furnishing of report of audit under any provision of the Income-tax Act for the previous year 2020-21 which was earlier extended to November 30 from October 31 has now been further extended to January 15, 2022, it said.

The due date of furnishing a report from an accountant by persons entering into international transactions or specified domestic transactions under section 92E of the Income-tax Act for the previous year 2020-21 has been extended to January 31 next year. It was earlier extended to November 30 from October 31. The due date of furnishing of belated/revised income tax return for the Assessment Year 2021-22 has now been extended to March 31 next year from January 31, 2022.

The tax department had earlier extended the deadline for filing the equalisation levy statement in Form-1 for the Financial Year 2020-21 till December 31, against the original due date of June 30.

Why the extension in deadlines?

The new income tax portal, http://www.incometax.gov.in, which was launched on June 7, has been facing glitches. The issues have ranged from login issues, including the inability to generate OTP for Aadhaar validation, password generation glitches, failure to link old data for past returns, and problems in filing returns to errors such as interest calculation, incorrect capturing of details from Form 16 and inability to e-verify the ITR after filing.

On Wednesday, the Income Tax Department had said that a number of technical issues on the new ITR portal are being progressively addressed and 1.19 crore ITRs for 2020-21 fiscal year have been filed. “It is reiterated that the Department is continuously engaged with Infosys to ensure a smooth filing experience to taxpayers,” the CBDT had said on Wednesday.

The Finance Ministry had on August 23 “summoned” Infosys CEO Salil Parekh to explain the issues resulting in disruption of the portal developed by the software major. In the meeting with Parekh on August 23, Finance Minister Nirmala Sitharaman had expressed “deep disappointment” over persisting glitches for more than two months after portal launch and has given a deadline of September 15 to Infosys to resolve the issues. A statement issued by the Income Tax Department then said Parekh explained that he and his team are “doing everything to ensure the smooth functioning of the portal”.

In June, within 15 hours of the launch of the portal, Sitharaman had tweeted about the glitches. “The much-awaited e-filing portal 2.0 was launched last night at 20:45hrs. I see in my TL grievances and glitches. Hope @Infosys & @NandanNilekani will not let down our taxpayers in the quality of service being provided. Ease in compliance for the taxpayer should be our priority,” she tweeted.

In response to her tweet, Nilekani said Infosys would work on resolving the issues. “The new e-filing portal will ease the filing process and enhance the end-user experience. @nsitharaman ji, we have observed some technical issues on day one, and are working to resolve them. @Infosys regrets these initial glitches and expects the system to stabilise during the week,” he tweeted.

On June 19, the company had acknowledged the problems with the I-T portal, when Pravin Rao spoke on this at the company’s 40th Annual General Meeting, stating that Infosys was working to resolve the concerns in the new income-tax e-filing portal.

On June 22, Sitharaman had called a meeting with key officials of Infosys to review the issues on the portal. Infosys was asked to address all issues without further loss of time, improve their services, and redress grievances on priority as it was impacting taxpayers adversely.

In 2019, Infosys was awarded a contract to develop the next-generation income tax filing system to reduce processing time for returns from 63 days to one day and expedite refunds. Till June 2021, the government has paid Rs 164.5 crore to Infosys for developing the portal.

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