Know why ITR reporting deadline for FY 2020-21 may be extended to December 31

The deadline to submit an income tax return (ITR) for the fiscal year 2020-21 is December 31, 2021. This deadline has already been pushed back twice, first from July 31 to September 30, 2021, and again to December 31, 2021. Chartered accountants and tax specialists, on the other hand, believe that there is a rationale for extending the ITR reporting date for people (whose accounts are not required to be audited)

In comparison to the previous fiscal year, FY2019-20, fewer taxpayers have filed their ITR this year in FY2020-21. According to a tweet from the Income Tax Department’s official Twitter account on January 11, 2021, more than 5.95 crore ITRs were filed for FY 2019-20. 

(January 10, 2021 was the last date to file ITR for FY2019-20). However, data shows that a little more than 3.59 crore ITRs had been filed as of December 15, 2021. With fewer than 15 days until the deadline of December 31, 2021, 2.36 crore ITRs are yet to be filed.

With less than 15 days to go, it’s probable that the rest of the people will be unable to file their tax returns due to the numerous faults that have been recorded on the newly established income tax system. It remains to be seen whether the newly opened e-filing income tax portal can handle the volume of people reporting ITRs at the same time in such a short period of time.

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Furthermore, for FY 2019-20, the government delayed the deadline for filing ITRs three times – initially from July 31 to November 30, then to December 31, and finally to January 10, 2021. The extension was granted despite the fact that the old tax filing portal was still in use, and there was no fear of new Covid-19 variations at the time.

“For individual taxpayers who are not subject to a tax audit, the extended deadline for filing taxes is December 31, 2021. Several issues with the new JSON utility continue, making it difficult for taxpayers to file their tax returns by the deadline. For example, problems in the utility linked to the computation of qualified donations and losses on residential property under the simplified tax regime must be resolved quickly. There are also operational difficulties. 

For example, the e-filing platform is excessively slow, and without an Indian cell phone or net banking, filing Form 67, which is essential for claiming foreign tax credit, and changing the password is still not possible. Furthermore, the AIS and TIS were just recently made accessible, leaving taxpayers with very little time to evaluate them before the end of the year.

Frequent Errors That Taxpayers Should Avoid While Preparing Tax Returns.

“In comparison to last year, around 50% of people have been able to file their tax returns. As a result, more than 3.5 crore tax returns must be filed in the next 15 days, which is a massive amount. Furthermore, the income tax website is brand new this year, with features such as pre-fill data, the Annual Information Statement (AIS), the Taxpayer Information Summary (TIS), and more. We anticipate the administration will make an informed choice in the next 5 to 10 days after considering all of the elements and scenarios.”

“The Income Tax Department has put out the Annual Information Statement (AIS), which gathers extensive financial data of the taxpayer, beginning with the financial year 2020-21 (i.e. for the year ended March 2021).” As a result, it is critical for the taxpayer to ensure that they have not only reconciled their income and reporting requirements with the Form 26AS, but also that they have thoroughly checked their reportable transactions / income that appears in the AIS. 

For the Financial Year 2020-21, the AIS database was just made available, which has resulted in an additional level of review that the taxpayer must complete before completing their tax return. AIS provides extensive information such as interest on bank accounts, securities transactions, mutual fund transactions, overseas transfers, deposit data, and so on. Given the income tax department’s delay in releasing AIS data on the new income tax portal, taxpayers must be given appropriate additional time to complete the process and ensure that their returns are complete in terms of income reporting and disclosure obligations.”