ITR deadline extended; PAN and Aadhaar must be linked by August 31 for return to be processed
The ITR deadline has been extended till Aug 5. But those who have filed returns must get their PAN and Aadhaar linked before Aug 31 for their return to be processed.
The extension is a welcome relief for a large number of tax payers struggling to meet the deadline in the face of various problems.
While extending the deadline for filing ITR, the government has also provided relief to people by allowing them to file their returns without linking of PAN and Aadhaar. However, quoting of Aadhaar or Enrolment ID in the return is mandatory as before and those filing the return without linking PAN-Aadhaar must link the two by August 31, 2017. The returns will be processed by the department only after the two ID proofs are linked.
This year there have been multiple changes which impact income tax return filing. These include: Requirement of linking PAN with Aadhaar, compulsory quoting of Aadhaar in tax returns, receiving TDS certificates late (as compared to earlier years) from employers and other deductors and chartered accountants being busy with GST. Further, the income tax department's efiling website has been running erratic and also seen shut downs (of several hours) for maintenance over the last fortnight.
In view of the difficulties faced by taxpayers, date for filing of Income Tax Returns for FY 2016-17 has been extended to 5th August, 2017.— Income Tax India (@IncomeTaxIndia) July 31, 2017
Infact, chartered accountants have been in favour of extension of the deadline due to one or more of these reasons.
Govt decided for e-filing return,it is sufficient to quote Aadhaar or acknowledgement No. for having applied for Aadhaar in e-filing website— Ministry of Finance (@FinMinIndia) July 31, 2017
Actual linking of PAN with Aadhaar can be done subsequently, but any time before 31st August, 2017.— Ministry of Finance (@FinMinIndia) July 31, 2017
Also Read: How to file ITR
Deadline to issue TDS certificates by banks and other deductors was extended this year
Central Board of Direct Taxes in 2016 had amended the rules relating to the deadlines for filing TDS returns by banks and other deductors who are liable to issue Form 16A (TDS certificate) to tax payers.
Due to this revision, the deadline for these deductors to issue Form 16A (for FY 2016-17) automatically got extended. According to the changed rules, the deadline for filing TDS returns by these entities was extended by 15 days from May 15 earlier to May 31. This allowed banks to issue Form 16A to their customers up till June 15, 2017 for FY2016-17.
This means that while earlier banks etc. were legally required to issue TDS certificates for a particular financial year to customers latest by May 31 (of the following financial year/relevant assessment year) this year (i.e. for FY2016-17) they could do so till June 15, 2017.
In fact, several banks actually took advantage of this and issued TDS certificates on or just before June 15, 2017. Consequently, customers got their TDS certificates this year later than in previous years. It is advisable to check the TDS in these certificates before filing one's return. Therefore, tax payers waiting to get these TDS certificates would have found it difficult to finalise their returns till after June 15.
Also Read: E-filing income tax return: How individuals can upload any ITR using excel utility
Extension of deadline for employers to give TDS certificate /Form 16 to their employees Earlier the last date for employers to issue Form 16 to their employees was May 31 of the assessment year. Assessment year is the financial year immediately following the FY for which the return is to be filed.
However, the finance ministry in its notification dated June 2nd, 2017 revised the deadline for issuing TDS certificates for FY2016-17 to employees by employers. As per the notification, the new deadline is now June 15 of the assessment year as against May 31st earlier.
This extension is similar to that for banks etc. however it impacts a larger number of people i.e. all salaried employees. This is because salaried employees not having income from other sources (e.g. from fixed deposits with banks) would also not have been able to file their returns without getting this Form 16 from their employer.
However, the returns will not be processed until the linkage of Aadhaar with PAN is done.— Ministry of Finance (@FinMinIndia) July 31, 2017
The income tax department notified the new ITR forms for FY2016-17 on April 1, 2017 itself instead of much later as was done in earlier years. However, despite this many people would not have been able to file their returns early due to non-availability of TDS certificates.
"All this has reduced the time in the hands of the taxpayer and the tax practitioner by 15 days. In addition to this, demonetisation and other efforts of the government to bring about compliance awareness amongst the taxpayers and to increase the overall taxpayer base is expected to increase the count of the tax return filers this year. This will cause a significant burden on the tax practitioners to complete the increased no of returns in 75% of the time allowed in earlier years", says Chetan Chandak, Head of tax Research H&R Block, India.
Also Read: Mistakes in filing income tax returns that may get you a tax notice
Changes in form along with additional compliance requirement of quoting Aadhaar/Enrolment ID
Last Union budget introduced additional compliance requirements for taxpayers. Starting July 1, 2017 it has become mandatory to link your PAN with Aadhaar and quote the Aadhaar number while filing ITR.
There have been cases reported where income tax e-filing website is not allowing the taxpayers to file ITR unless Aadhaar is linked with the PAN. Some people are facing genuine issues in linking of PAN with Aadhaar as there is mismatch in the details.
Without linking your Aadhar card with PAN you cannot file your Income tax return and out of 6.09 cr people registered with IT department website only 2.67 cr have linked their Aadhar and PAN. till now and tax filers are facing problems in linking their cards due to name, DOB etc. mismatches. And those with a mismatch in their details are unable to link before the due date as the average time of updating details in Aadhar card is 10 days. Thus, looking at the statistics and the practical problems people are facing, the tax department has to extend the due date, says Abhishek Soni, CEO, Tax2Win.in
Though government has vide exemption notification dated 37/2017 notified certain category of tax payer's from the compulsory quoting of Aadhaar in their tax return. But there is still a confusion amongst the taxpayers as to how the exemption for taxpayers residing in the States of Assam, Jammu and Kashmir and Meghalaya is getting implemented, whether it is based on the address given in the tax forms or the PAN jurisdiction? Further, this notification exempts foreign citizens from application of section 139AA. But current tax forms do not have any facility to provide the details of the taxpayer's citizenship. This is causing problems for those foreign citizens who qualify to be "Resident" of India for the tax year but they have already left the country before the budget amendments were proposed. Now they are not able to upload their tax returns on e-filing portal as tax forms does not allow them to state that they are foreign citizens", says Chandak.
Shalini Jain, Tax Partner, People Advisory Services, EY - "Individual tax payers are facing genuine difficulties in filing tax returns due to the PAN-Aadhaar linkage (requirement). In some cases, foreign citizens who are qualifying as 'Ordinary residents' of India are not able to upload the return due to wrong categorization of such individuals as 'Indian citizens' on the e-filing portal of Income tax department. Given these issues, it would be good to have an extended window for filing of the tax returns."
Also Read: How to rectify income tax returns
Chartered Accountants being busy with the arrival of GST
With the onset of the new indirect tax regime- GST, chartered accountants are very busy helping their business clients. GST being a huge change is taking up a lot of their time and would also be getting them a lot of consultancy business.
Consequently, they may not have been able to spare as much time as before to advise individuals on direct tax filing and returns in some cases may be getting delayed because of this.
"GST being most crucial aspect of any business, any delay or error in complying with GST norms can be most detrimental both financially and reputation wise for any business entity as such during the crucial month of July (which is also the most important month for income tax compliance) most of the tax practitioners were busy in GST related compliances because of it's financial impact. This has left them with a very little time for the income tax related compliance" says Chandak.
Considering all these reasons we think that department should allow some relief by extending the due date by few days.