Income Tax Returns- ITRs: The Last Minute Rush Is Forced upon Us!
Artha Shastry 08 August 2022
31st July brings trepidation and fear to the hearts of many an honest taxpayer—one suspects that dishonest taxpayers, in any case, are not prone to attacks of conscience. The reason for the trepidation, of course, is that 31st July is the deadline for filing the appropriate income-tax returns (ITRs) by individuals earning income from salary or profession, not subject to audit. One is required not just to pay one’s taxes honestly but also to file a detailed return with huge amounts of information, to enable the central board of direct taxes (CBDT) to verify one’s honest compliance. 
 
The ministers and officials of the Union government are quick to decry the taxpayers’ tendency to wait till the last minute before filing, thus needlessly adding to the system pressure and personal stress. They have a valid point in that human beings everywhere tend to procrastinate ahead and wake up only when something cannot be delayed any longer. Is this the only reason for the last-minute rush to file taxes? Far from it. Irrational and unhelpful regulations of the CBDT play a major part in the last-minute filing. 
 
All taxpayers, and even those with incomes over the base tax limit but not liable to pay tax, are required to file an appropriate return of income for the previous financial year by 31st July of the succeeding financial year. For a change, this year, the CBDT announced the ITR forms as early as April 2022. 
 
Bear in mind that you cannot simply assume that an ITR form used last year is valid and go ahead with your filing. Thanks to ever-changing bureaucratic tinkering in the Union Budget and otherwise, the scope and layout of ITRs change from year to year. 
 
One wonders why CBDT waits till April 2022. After all, the ITR for FY21-22 is impacted primarily by the Budget 2021-22, which is announced on 1 February 2021! 
 
While some changes may be announced after that, there is no reason why CBDT needs to wait until April 2022, leaving just four months before the ITR filing deadline, to announce the appropriate ITR forms to be used. 
 
To make matters worse, while the ITR forms were announced in April 2022, the software utilities for the various ITRs (1 – 7) were released over the next couple of months, and the CBDT kept modifying them from time to time. Some modifications occurred as late as 25 July 2022 – barely a week prior to the filing deadline! 
 
Can one blame a taxpayer for being confused? 
 
Until a couple of years ago,  CBDT used to release the utility in MS Excel, which is familiar to many taxpayers. Last year, without a word of explanation, they shifted to a Java-based utility, which baffled taxpayers who struggled to get to grips with it. Why shouldn’t it be mandatory for CBDT to release the utilities by April 2022 at the latest and no modifications thereafter? 
 
In order to file one’s ITR, it is essential to have in possession forms 16A and B issued by the employer. Though the financial year ends on 31 March 2022, and most audits begin around then, CBDT generously permits employers to issue forms 16A and B up to 15 June 2022! 
 
Why give the employer two-and-a-half months to issue a form which merely captures static data about payments and deductions during the year and then insist that the dynamic data be completed by the taxpayer in one-and-a-half months? Why not insist that forms 16A and B be issued by the employer latest by 30 April 2022, giving enough time to the taxpayer?
 
Even form 26AS, which is essential for the taxpayer to fill in the ITR, is delayed by CBDT. PAN numbers are cited by the employer in deducting taxes by corporates and banks paying interest and dividends. Yet, CBDT is highly lackadaisical in making the completed form 26AS available to taxpayers. 
 
Just as with forms 16A and B, the CBDT kindly permits tax deducted at source (TDS) returns to be filed right up to 31st May of the succeeding financial year, even though all details of TDS should be available well before. TDS in any month is supposed to be deposited by the deductor within seven days of the succeeding calendar month. Thus, all amounts of TDS up to 28th February of the financial year would have had to be deposited by 7th March of the same year. 
 
Only as regards TDS during the month of March the amounts can be deposited as late as 30th April. Why so? Monies by way of TDS are the property of the Union government and there is no reason to allow corporates to enjoy the float as working capital for 30 days. 
 
Since corporates can thus delay their TDS deposit till 30th April, they are kindly allowed time up to 31st May to file the TDS returns. Only after the TDS returns are filed and processed will the form 26AS be updated and available to taxpayers! And it can be quietly updated by the CBDT at any point thereafter without notice to the taxpayer – so one cannot be sure of the final form 26AS till maybe mid-July. 
 
See the disparity, therefore! We keep hearing about taxpayers waiting till the eleventh hour to file their return of income and tax; nothing is ever said about CBDT making critical information available much later than it can or should. The balance of convenience is for the corporates deducting tax and for CBDT itself, not for the harassed taxpayer. 
 
Can we propose a refinement in the system? We, as taxpayers, commit that we will not only file our return of income and tax by 31st July; we will do so well prior to the due date. In return, we ask that :
 
1. The ITR forms be released by the CBDT at least by 30th June of the relevant fiscal year—any changes after that date to be prominently publicised and explained;
 
2. The software utilities be released by 30th September of the relevant fiscal year—any changes after that date to be prominently publicised and explained;
 
3. Forms 16A and B to be issued by the employer by 30th April of the succeeding financial year; 
 
4. Form 26 AS and the AIS/TIS to be issued in final form by the CBDT by 31st May of the succeeding financial year—any changes after that date to be informed to the taxpayer at the time of such modification.
 
The above timelines will be fair to all concerned, viz., CBDT, employers and taxpayers. Can we please have these from FY22-23, which is AY23-24?

Madam finance minister, you will greatly help honest taxpayers by doing this. 
 
(Artha Shastry is a banker who wishes to remain anonymous.)
 
Comments
sridharmg56
4 weeks ago
Rightly pointed out the lapses of Finance Ministry and blaming tax payers. Complicating seems to be government 's character
Why should the LTCG & STCG columns be included in form 1 also.
Form 2 is very complicated and cannot be filled by tax payers themselves
26 AS, TIS , AIS all should be merged into one to avoid hassles
snshetty69
2 months ago
Such an apt article.
r_ashok41
2 months ago
Revenue dept and Finance dept have become very stubborn and adamant and only if they make mistakes they extend the dates and also give sufficient time for the software company to rectify even though they are being crores of rupees whereas people who are not able to file for various reasons are not given any extension to file especially it has been made so much complicated for sr citizens we need to engage a tax consultant giving him money to file which was not the case earlier and with rising inflation and interest rates not keeping pace and price of basic needs being taxed indiscremetly by the gst council without even considering what to tax or not like the eraser/sharpner/pencil etc like the letter written by a school girl to PMO and hope they take notice of it and reverse it.We are in very bad shape with dwindling resources .hope the present revenue and fm take cognisance of it and think about common man and poorer sections and not only big people .I think it may not be long before the present govt puts taxes on the air we breathe
david.rasquinha
2 months ago
Attitude also matters. The Revenue Departments has an adversarial attitude towards the taxpayers and starts with the assumption that we are all cheats. Hence the volume and variety of forms to be filled in and referred to and validated. It is high time the attitude changed to one of service. We taxpayers provide the revenues that run the government.

Additionally, it beggars belief that Indian software firms do business for the best of global companies and yet the sad tale of the IT utilities and the GSTIN are well known. Certainly the tax payer is responsible for paying taxes and filing returns on time. But can the Revenue Department not help them rather than making us jump through hoops.
pr_vaidya
2 months ago
ArthaSastry is right and experts saying they filed in 15 minutes are not representing the majority. Another point which needs to be raised is unnecessary usage of two terms for two years viz Financial year ( They call it previous year) and Assessment Year. Dears, Assessment year is YOUR problem. We earned in a particular year and are filing for that year. Why confuse common man with Jargon? Multiple papers with different terminology. (For example Bank Statements are for F Y ). Someone can be filing after 4 years, which year you will call Assessment year?
There is another issue to be addressed. For knowing Tax Credit we have to go to TRACES with a different Login. After all department receives tax, department should give us credit statement. Why NSDL?
david.rasquinha
Replied to pr_vaidya comment 2 months ago
Very good point Vaidya-Ji. Why should we needlessly visit multiple websites? Let the IT people manage it all in one set.
palaparthi59
2 months ago
Interest on Savings Deposits formed part of AIS this year.

Saving Depisit account mainly comprise Salary or pension and interest on Fixed Deposits.
It is not proper to tax interest on Saving Deposits as its source salary, FD interest etc. is already included in total income.
In view of this taxing SB interest would tantamount to double taxation.
yogeshco
2 months ago
THE WRITER SEEMS TO BE ILL-INFORMED ABOUT THE TDS FOR THE MONTH OF MARCH. MANY COMPLEX THINGS NEEDS TO BE COMPLETED IN THE MONTH OF MARCH DUE TO WHICH TRADITIONALLY MORE TIME IS GIVEN FOR TDS OF MARCH.
REGARDING 31ST JULY, I THINK DEPT NEEDS TO HAVE A SYSTEM OF GRADED PENALTIES ON MONTHLY BASIS AND NOT SAME PENALTY FOR 1 DAY OF DELAY AND 5 MONTHS OF DELAY. THIS WAY CASES OF GENUINE HARDSHIP WHO COULD NOT COMPLETE ON 31ST JULY WILLBE ABLE TO FILE IN AUGUST WITH SMALLER PENALTIES THAN SAY THOSE FILING IN DECEMBER.
abhibvp5
2 months ago
It is like the author can read my mind. Where is the 'Like' button when you actually need one.
artisgr8
2 months ago
When it was manual some Citizen were paying bribe to file ITR after due date. Like Govt says it should be file by so and so date Tax Payer should also file and when details are pending from Govt End then that provision should be there in software of govt. to get it the same if delayed from their part. When assessment take place ask tax payer to approve or reject with reason and thus whole system can work on time.
mudit3
2 months ago
The government likes to harass the honest citizens as they remain servile and do not develop ideas. Indian government is world class in this strategy, maybe the best
GOWRISHANKAR
2 months ago
Dear Angelo, you are bang on. Why and how does the interest on Refund tantamount to income during the Current Year? It sounds so foolish. When I tweeted this anomaly the reply I got was that I should share my email and PAN number on Twitter for them to reply personally. I Strongly protested that their reply should be in the public domain. There ended the matter. The issue was closed. This is the attitude of this bloody government Department where everything is by and large, outsourced. Then why should the tax payers money be used to pay salaries and pension to these White Elephants. Can someone file a public interest litigation/RTI enquiry with regard to this anomaly? Its high time that we the salaried class asserted ourselves.
rkhgajjar
2 months ago
Absolutely correct
Duty is on CBDT as well,not only on Tax Payers.
Tax payments & Tax filing should be a pleasant experience,not agony.
Fully support to every demand raised.
Let it reach Finance Minister
svramani56
2 months ago
Artha Shastry - blame it more on oneself than the govt. I find that the IT dept has made the entire task of filing the returns very easy. ITR 1, 2 and 3 are very easy and do not ask for “detailed returns” with “huge amounts of information “ as claimed by the author. It takes 15-20 minutes of our time once we have all the information like interest on banks deposits and other income. Let’s cut the hyperbole and get down to business. I filed my return in ITR-4 well before the due date. My wife filed hers in ITR-3 in the first week of July and the return was processed in 3 days flat with refund. Let’s give credit where it is due.
Kamal Garg
Replied to svramani56 comment 2 months ago
While time allowed to companies to deposit TDS and updating Form-16 and AS-26 is debatable and even right also, but, the time needed to file your return is not more than one hour, at max. Why 72 lakh returns were filed on the last day, i.e. 31st July. What all taxpayers were doing for more than 45 days minimum and 120 days maximum?
angelo.extross
2 months ago
Ever wondered how the "Refund" of IT of the previous year becomes the "Income" of the next year? For the past few years the ITR forms need you to include the previous year's "refund" as "income" under Bank Interest, etc. and it gets taxed again!
Suppose my tax liability this year is Rs. 10,000/-. While filing the return it may be that the Taxes Paid (incl. Advance Tax which I pay more to be "safe" than "sorry") are Rs. 10.010/-, 10,500/- , 20.000/- or any other figure for that matter. The "Refund" I get is from my "Income" of the Assessment Year. How does that "Refund" get converted into an "Income" of the next year? Is it a case of "Double Taxation" as well as "Double Incomeisation"?
Request ML to kindly take up this issue with the concerned authorities and/or advise us how to go about addressing this anomaly.
svramani56
Replied to angelo.extross comment 2 months ago
Refund is not taken as income. Only the interest paid on the refund is treated as income for the year. Get your facts rights before responding on a public platform.
Kamal Garg
Replied to svramani56 comment 2 months ago
Yes, this is the correct interpretation.
shyam.madhavdas
Replied to angelo.extross comment 2 months ago
Refund does not get added as income. It is the Interest on the refunded amount that gets added as income.
angelo.extross
Replied to shyam.madhavdas comment 2 months ago
Thank you for the prompt clarification
sha79
2 months ago
Excellent recommendations. I hope the top bureaucrats at the CBDT take up these practical suggestions.
Verify Your Income-tax Return- ITR Within 30 Days, Else…
Moneylife Digital Team 02 August 2022
The income tax (I-T) department has reduced the time limit for e-verification or hard copy submission of the ITR-V (income-tax return verification), post-filing of returns by taxpayers, to 30 days from the current 120 days, from 1st...
Free Helpline
Legal Credit
Feedback