Perils of filing tax returns amid glitchy portals and uncertain deadlines

- July 17, 2022
| By : Patriot Bureau |

With the deadline for filing income tax returns for the financial year 2021-22 and assessment year 2022-23 is set for 31 July - after being postponed for the last two years - financial analysts and chartered accountants shed light on the challenges one faces while filing these returns

Many organizations have requested the Ministry of Finance for the extension of the due dates of income tax returns (ITR) for salaried and non-corporate (not subject to audit) taxpayers from 31.07.2022 to 31.08.2022. 

One such request was made by the Gujarat Chamber of Commerce and Industry.

More recently, the portal E-filing 2.0 is facing snags on the first anniversary of its launch, and several users have complained that they were unable to login into the portal, while others reported failure of search functionality. 

The various problems pertaining to the portal are:

  • Website login takes a lot of time to access
  • Issues in downloading Form No. 26AS, AIS and TIS
  • IT software not supported and problems while switching to the website 
  • The TDS and TCS as per Form No. 26AS not reflected in the pre-filled ITR; ITR5 not being updated
  • For some, logging in to the portal to fill details, only shows only the ITR.
  • Failure in generating Aadhaar OTP; 

Link issues in Form Nos. 15CA, 15CB and others, and so on. 

“The irresponsible behaviour of the tax payers might be a reason for the ITR filing dates being extended again”, says Gaurav Chauhan, company secretary and founder of a financial  consultancy firm Gaurav Chauhan and Associates.

The deadline has been extended for the last two years due to the coronavirus pandemic, but even with the situation improving, we may still have an extension on our hands. Chauhan says, “People wait till the last minute to file their ITR. Some people ignore the scheduled date and are okay with penalty fines rather than paying their dues on time.”

Chauhan further adds that there are 10,30,78,415 registered users in our country, and while we’re in the second half of July, only 1,44,75,661 returns have been filed so far with nearly 80% of users yet to file in two weeks time. “There are several stages and procedures that must be followed even after filing the returns, making it appear nearly impossible for all users to file on time”, says Chauhan. 

Reasons for the delay 

Sumit Bhati, a practising chartered accountant and advocate, says, “People these days watch videos on YouTube and try to file returns on their own in order to save the fees that a chartered accountant charges. However, what people don’t realise is that there are various technicalities that only professionals know about.”

Bhati further says that the new E-filing portal is facing many glitches. “A lot of taxpayers have been facing issues with the new portal since last year”, he says. Many of his clients have been complaining about the introduction of this new portal and the continuous changes in the rules.

He adds, “Earlier, it was easy for individuals to locate the ITR-1 form, but now, even that is complicated.”

Vineet Kumar, an aspiring accountant, elaborates on the common errors made by taxpayers. These mostly include selecting incorrect form, furnishing incorrect personal information, quoting the wrong assessment year, and the fund details of salaried individuals. “Usually, providing information on the deductions, credit and debit and other details is delayed from the employers’ end, which also causes a delay in the filing of return by the taxpayer”, he says. 

Many a times, taxpayers delay paying the taxes or avoid it altogether by adopting inaccurate means. 

Kumar says, “Tax evasion or using illegal methods to avoid paying taxes has been common in recent years. People do not disclose all sources of income to their accountants, especially as stock trading has gained popularity among many, and taxpayers do not report their losses in order to avoid paying tax on them. This is necessary because one has the option to carry forward their losses to the following financial year.”

He adds that nowadays, it is extremely typical for smaller businesses to falsify expenditures, especially by presenting additional employees and their pay, indicating an additional price on the infrastructure, or by making irregular hard cash transactions where the authorities do not maintain a rigorous check. 

On condition of anonymity, a chartered accountant says, “Since donations are tax-free to an extent of 85%, using fake charity is the safest way to evade taxes. Many tax payers give donations to a charity organization so that they will appear in the records, and then they withdraw cash from the same charity in return. Moreover, rotation of funds in two beneficiaries and reflecting that as loan is a practice widely used to get off of taxes these days.”

While the tax slab has been given a rise of 20% for people earning more than Rs 5 LPA, a lot of people from the middle class with salaries below Rs 10 LPA are stuck with different issues like rising rates over the years and a vague understanding around the topics of tax and ITR. 

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