Five Reasons Why Income Tax Return Deadline Got Extended this Year

The Central Board of Direct Taxes (CBDT) on Tuesday notified that the due date for filing income-tax return (ITR) for assessment year 2019-20 (FY 2018-19) has been extended to 31 August 2019 from 31 July 2019 earlier. While many expected such a move, considering it’s not the first time that the deadline for filing ITR has been extended, there were five specific factors this year that prompted the government to take such a decision:

1) One of the key reasons behind the deadline extension was the late release of online utility for ITR filing, which was released with some new updates. The online utility for ITR-2 and ITR-3 was released on 12 July 2019, just two-and-a-half weeks before the original due date of 31 July. The ITR-5 utility was made available on 19 July 2019 only, leaving taxpayers in this category with just 12 days to file return.

For those unaware, ITR utility is software introduced by the income tax department, which helps a taxpayer to file the income tax returns easily. Every year, the income-tax department releases updated versions of the ITR Utility Software for online filing of ITRs.

2) The second reason could be that the due date for filing TDS returns via Form 24Q and 26Q for the first quarter of financial year 2019-20 was also 31 July 2019, same as the original deadline for ITR filing. Hence, it might have been difficult to comply with both the deadlines on the same date.

3) The third and the most significant reason was the extension in the due date of issuance of Form 16 from 15 June to 10 July. This left only 21 days for the salaried taxpayers to file their ITRs using Form 16.

4) Another reason behind the extension was detailed reporting of information while filing ITR this year. For example, now salaried individuals filing ITR-2 are supposed to furnish their complete salary break-up as well. Similarly, taxpayers who held shares in unlisted companies were required to provide PAN and other details such as cost of acquisition, face value of shares and so on of the unlisted companies. Given the changes in ITR forms and the additional reporting requirements, an extension in due date of filing ITR was expected.

5) Lastly, the Excel and Java tax filing utilities were undergoing constant changes. As per recent updates in ITR-2 and ITR-3 on 11July, taxpayers were required to report the ISIN code, name of the shares, number of shares sold and so on in case they have sold any listed shares. However, later CBDT clarified that reporting of such information is optional. But this led to a lot of confusion among taxpayers and, hence, the income tax department could have decided to extend the deadline to avoid any panic situation among taxpayers at the last minute.