Here’s Why 45 Days Isn’t Enough for Salaried Individuals
The current deadline to file income tax returns (ITR) for FY 2023-24 (AY 2024-25) is set for July 31, 2024. This timeframe, while applicable to taxpayers whose accounts do not require auditing – including salaried individuals and certain self-employed professionals – remains insufficient. Here, we delve into why this deadline is unreasonable and advocate for a permanent extension.
1. Inadequate Time Post TDS Certificate Issuance
Despite the income tax department releasing ITR forms at the financial year’s start, many salaried individuals are hindered by the delayed availability of critical TDS certificates such as Form 16 and Form 16A. These documents, essential for accurate tax filing, are typically issued by June 15. This effectively compresses the filing window to a mere 45 days, from June 15 to July 31, a duration glaringly inadequate for thorough tax preparation.
2. Timing of AIS and Form 26AS Updates
The Annual Information Statement (AIS) and Form 26AS are pivotal for taxpayers, reflecting income and tax deductions respectively. These are fully updated by May 31, as entities responsible for filing the Statement of Financial Transactions (SFT) and TDS returns must do so by this date. Consequently, taxpayers require sufficient time beyond June 15 to reconcile these documents with their financial records, underscoring the necessity for a deadline extension.
3. Complexities of Collecting Supporting Documents
The process of collating additional documents such as capital gains statements from mutual funds, interest certificates from banks and the RBI, and income details from post office schemes, is intricate and time-consuming. Given that some interest income may not appear in the AIS, taxpayers must diligently verify and report all income sources to avoid discrepancies and potential tax notices.
4. Switching Tax Regimes
Taxpayers may opt to switch between the new and old tax regimes during the ITR filing process. This switch entails meticulous recalculations of taxable income, accounting for deductions and exemptions applicable under each regime. Such detailed financial planning cannot be satisfactorily completed within the constrained timeframe currently provided.
Expert Opinions on Extending the ITR Filing Deadline
Sujit Bangar, a former IRS officer and founder of TaxBuddy.com, emphasizes the impracticality of the current deadline. He suggests a three-month period from the issuance of TDS certificates, proposing September 15 as an ideal deadline for non-audit cases. Similarly, Suresh Surana, founder of RSM India, advocates for a permanent extension, highlighting the disproportionate pressure on taxpayers to compile financial data and file returns within just 45 days.
In conclusion, extending the ITR filing deadline beyond July 31 to a more reasonable date, such as September 15 or even August 31, is imperative. This adjustment will ensure that taxpayers have adequate time to accurately prepare and file their returns, ultimately fostering compliance and reducing undue stress. The call for a permanent extension is not just a matter of convenience but a necessary reform for fair and efficient tax administration.
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