InvestorQ : Do you see the tax filing deadline being postponed in the current year also beyond July 31st?
Deepa Salunkhe made post

Do you see the tax filing deadline being postponed in the current year also beyond July 31st?

Arya Nanda answered.
4 weeks ago

Normally, the tax filing deadline is the 31st of July. In the last 2 years, the government gave liberal extensions due to the pandemic and related problems. The problem with exceptions is that people tend to assume that as the norm, so there is a strong excpectation that the same would get postponed this time also. The result is that the number of filings have been less than 1 crore till date with more than 7.5 crore filings likely to be done by the end of July. As usual the bugs in the Infosys software are also adding to the delays in filing returns.

Prima facie, there could be an extension of the data nad here is why.

a) In a recent series of tweets, the Income Tax department publicly admitted about a delay in execution of transactions on the income tax website when it had to handle additional volumes. Normally, that tends to be a a tacit indication of a postponement of the last e-filing date. July 31 may not be practically possible.

b) The problem lies in the tepid numbers. Till the 10th of July 2022, just about 99 lakh income tax returns had been filed and the total potential returns to be filed this year are in the vicinity of 7.50 crores to 8.00 crore ITR filings. It is not practically feasible to complete up to 7 crore crore ITR filings in a span of 21 days.

c) If deadlines have to be maintained, then the software and the portal submissions and verifications have to work smoothly. Otherwise timely filings are impractical. As of now, unless the portal works smoothly and deadlines are extended by at least 30-45 days, it looks to be almost impossible for taxpayers to comply with the July 31 deadline. Hence a postponement looks all the more inevitable at this juncture.

At the end of the day, the one concern that it does raise is the credibility of the IT department and of the software provider. Just look at the numbers. In the last 11 years, there have been 8 deadline extensions, which does not speak too well about the consistency of service offering. The Income Tax department, the government and Infosys must keep this in mind when announcing another postponement.