The last date for filing income tax return (ITR) for the assessment year 2019-20 with no penalty or a fine is July 31, 2019. However, the due date for ITR filing may get an extension for the taxpayers to file the return of income well beyond the last date even without paying any fine. The ITR filing last date had been extended several times in the previous years for different reasons. However, this time till now, the reasons appear to be related more with the modifications made to the various Forms used during the ITR filing process.
Here are 5 important reasons that may make the government extend the ITR filing due date.
1. Extension of Form 16 issue date
On June 4, 2019, Central Board of Direct Taxes (CBDT) had issued a notification extending the deadline for the employers to issue Form 16 to employees from June 15 to July 10. It has been observed that several employees had still not received Form 16 even after the due date. With only a few days left, if Form 16 is received at a later date, the time to file ITR will understandably be less. "Salaried taxpayers now have a shorter window to file their tax returns due to the extension of the due date of providing Form 16 for employers. In the wake of this extension, the due date for tax filing may be extended so salaried taxpayers can plan to file their tax returns in time," says Archit Gupta, Founder & CEO ClearTax.
2. Changes in Form 16
There are two parts of Form 16, in which Part A was standardised for all employers but the Part B was not standardised. The new rule asks the employer to ensure generation of accurate TDS certificate in Part B of Form No. 16 As per the new format, every employer is required to report the detailed break-up of salary, exempt allowances and deductions claimed and allowed to an employee.
3. Extension of Form 24Q issue date
The CBDT had also extended the due date of filing of Form 24Q for the financial year 2018-19 from May 31, 2019, to June 30, 2019. The Form 24Q is a quarterly statement of deduction of tax in respect of salary for the four quarters of the financial year and is to be filed by the employer. As per the new rules, the employers have to report correct data in Annexure II of Form 24Q.
4. Verification of pre-filled data
Once Form 16 is received, one needs to ensure if the employer has generated it from the TRACES, the official software of the income tax department. Also, it is important to ensure that the figures in Form 16 and Form 26AS are matching. Lastly, the I-T department has cautioned that the pre-filling of ITR is only for the taxpayer’s convenience. Therefore, as a taxpayer one needs to verify the pre-filled data carefully and add any other taxable income which is not pre-filled.
5. Long term capital gain (LTCG )
The long term capital gain (LTCG ) tax was re-introduced in the FY 2018-19 and assessee were finding it a tad difficult to enter the figures in the software while filing the ITR. "Reporting LTCG on ClearTax is fairly simple since we allow uploading of CAMS report or even an excel file. However, the reporting of LTCG on equity shares has been introduced for the first time, the portal’s reporting section has recently undergone some change too. Those who have not yet finished calculations and made tax payment arising due to gains may need more time," informs Gupta.
Latest CBDT clarifications
The Income Tax Department has recently issued a clarification from the CBDT that has responded to reports in social media that taxpayers were facing difficulties in the filing of IT Returns in ITR-2 & ITR-3 due to large scale changes in the ITR form. It was made clear by CBDT that no changes have been made in any of the Income-tax Return (ITR) forms including ITR-2 and ITR-3 since the notification made on 1st April 2019 and further clarified that the software utility update is a dynamic process, done continuously based on feedback received from users, to ease filing and that the updating of utility doesn't hamper filing of ITR as taxpayers are allowed to file using utility which is available at that point of time.
Further, on July 19, CBDT clarified that taxpayers have an option to either enter the Scrip wise details of long term capital gains or enter the self-calculated aggregate value of long term capital gains directly, without entering scripwise details. Taxpayers may exercise either option based on their convenience.
Even though these 5 reasons for an extension exists as of now, the last date for ITR filing may not be extended if things fall in place. It’s always better to not wait for the last minute and file the ITR well in advance.