Income Tax

CBDT extends ITR filing deadline for FY 2020-21

The Central Board of Direct Taxes extended the deadline for ITR filing (FY 2020-21) for certain category of taxpayers. The income tax department made this announcement through a press release dated Jan 11 2022. Along with the extension in ITR filing deadline the CBDT also extended the due dates for filing tax audit reports. Now the new due date to file ITR in audit cases for AY 2021-22 has been extended to 15 March 2022 and the last date to submit tax audit reports is pushed to 15^th February 2022.

Extension of ITR Filing Deadline- Reason behind extension

The decision to extend the deadline was taken after various taxpayers asked the tax department and finance ministry to move the dates forward due to the increasing cases of coronavirus and also considering the issues faced by taxpayers on the income tax portal. The press release stated that on consideration of difficulties reported by the taxpayers due to coronavirus and in electronic filing of reports of audit under Income Tax Act 1961^[1], the CBDT has decided to extend the deadline for ITR filing and various audit reports for AY 2021-22.

Tax associations, taxpayers, tax professionals across India had appealed to the government to increase the deadline for submission of tax audit reports and ITR filing. Moreover, twitter was also abuzz with taxpayers appealing to the government for deadline extension.

ITRs filed till December 28 2021

As per a report, 4.8 crore ITRs were filed till December 28 2021 for AY 2021-22. The total number of ITRs filed for FY 2019-20 stood at 7.3 crores and for FY 2018-19 it stood at 6.7 crores. There has been a constant growth in the number of ITRs filed over the years. However, the total number of ITRs filed till 28 December is less than the total number registered in the previous year. Hence, the number of people who have not filed IT returns amounts to a substantial figure.

Fresh Due Dates issued by CBDT

According to the press release, fresh due dates are as follows:

• The deadline for furnishing report of audit under any provision of the Income Tax Act for FY 2020-21 that was September 30, 2021, in case of assesses referred to in clause (a) of the explanation 2 to sub-section (1) of section 139 of IT Act, extended to October 31, 2021 and January 15, 2022 is now further extended to February 15, 2022.
• The deadline for submitting report of audit under any provision of the Income Tax Act for FY 2020-21 that was October 31, 2021 in case of assesses referred to in clause (aa) of the explanation 2 to sub-section (1) of section 139 of IT Act, has been extended to February 15, 2022.
• The deadline to furnish report from an accountant by persons entering into the international transaction or specified domestic transaction under Section 92E of Act for previous year 2020-21 that was October 31, 2021, then extended to 30th November 2021 and 31^st January 2022 has been further extended to February 15, 2022.
• The deadline to furnish return of income for FY 2020-21 that was October 31 2021, under sub-section (1) of section 139 which was extended twice, is further extended to March 15, 2022.

Here it is important to note that in case of individual taxpayers whose accounts are not required to be audited, the ITR filing deadline for FY 2020-21 has already expired as the due date was December 31, 2021.

Who benefits from the extension of ITR filing deadline?

The following category of taxpayers will be benefitted from the extension of deadline:

• Corporate assessee;
• Non-corporate assessee whose books of accounts need to be audited;
• Partner of a firm whose accounts needs to be audited and spouse of such partner if the section 5A provisions apply;
• An Assessee who must submit a report under Section 92E related to the international or specified domestic transaction.

Hence an individual taxpayer who does not come under any of the categories mentioned above, will not get any extension benefit.

What happens if you fail to file within the deadline?

You will still be able to file your returns however, there will be financial implications that you don’t want to fall into. If you fail to file ITR within the due date, then you can file a return called “Belated Return”. This return can be filed under Section 139(4) of the Income Tax Act however the assessee will be liable to pay penalty.

Moreover, it’s not just about the late fee penalty that forms the part of the financial implication of not filing the return within the due date but you will also have to pay penal interest on the unpaid tax liability, if any.

Takeaway

The extension of the ITR filing deadline comes as a massive relief for corporate taxpayers. The taxpayers faced difficulty owing to the surge in Covid cases and also due to technical glitches during filing tax audit report and other compliances under ITR.

Read our article:Financial consequences for late filing of ITRs