Last week, a chartered accountant’s tweet claiming that income tax return (ITR) forms had been changed last-minute created quite a flutter. Thankfully, the Central Board of Direct taxes (CBDT) stepped in just in time to clear up the confusion—clarifying that it was just the ITR forms meant for partial online filing that had been updated a little later, and all other ITR forms were updated and made available online by the income tax department on 1 April 2019 itself.
On 15 July, chartered accountant Nikhil Vadia tweeted, “There are 47 changes made in income tax return (ITR) 2 form and 53 changes in ITR 3 on July 11, 2019. Software providers will take at least one week to make changes available. We are heading for a disaster in income tax return filing this time."
However, CBDT refuted Vadia’s statement and clarified that only the income tax utility forms (meant for partial online ITR filing) were updated on 10 May, with the same changes that were notified for other ITR forms on 1 April 2019. Partial online ITR filing is where you need to download the applicable income tax utility either in excel or java format, fill the form offline, save it, generate an XML file and then upload it. Complete online filing is where you enter the relevant data directly in an online form and submit it.
“No changes have been made in any of the Income-tax Return (ITR) forms including ITR-2 and ITR-3 since the notification made on 1st April 2019, i.e. on the 1st day of the Assessment Year 2019-20," CBDT stated. It added that utility updating is a dynamic process and is continuously taken up, as per the feedback of users or filers. Moreover, updating of utility does not hamper filing of return as the taxpayers are allowed to file using the utility which is available at that point of time.
Though it is true that the details released for ITRs form showed that there were 47 changes in ITR-2 and 53 in ITR-3, according to experts, these were available for complete online filing forms from 1 April 2019, and from 10 May 2019 for forms meant for partial filing.
“Except a few changes, most of the changes are small and do not significantly impact tax filing," said a tax expert, on the condition of anonymity.
However, some other experts feel tax filing may have become a little tougher to navigate. “There have been quite a few changes in the ITR form, wherein detailed explanations are required to be filled by individuals which makes ITR filing cumbersome and time taking. Individuals now need to be aware of the type of deductions and exemptions to be claimed and those that are allowed," said Heena Arora, marketing and finance head, All India ITR, an e-filing portal. For instance, you now have to fill details of long-term capital gains (LTCG) separately for different asset classes. For instance, if you are mentioning LTCG from equity, you will need to fill the details separately after factoring in the exemption of ₹1 lakh.
A lot of experts do not think changes in the ITR forms should lead CBDT to consider extending the ITR filing deadline, currently 31 July 2019.
But extension of the deadline for employers to provide Form 16 to their employees from 15 June to 10 July is being seen as a good enough reason to extend the tax filing deadline. Many employees received their Form 16s only recently. “Yes! This is indeed one of the major reasons why CBDT should extend the ITR Filing due date. There are a lot of companies that have still not provided Form 16s to their employees," said Arora. Form 16 is a certificate that broadly mentions the income earned by the employee during the year, total tax deducted at source (TDS), besides exemption and deductions claimed during the year. For a salaried person, Form 16 is an important document for filing ITR.
“As employees started filing their ITR only after 10 July, there is bound to be a surge in return filers in the last three weeks of July. Every year, the return filing website goes down when there is a sudden increase in traffic. Considering the recent changes and to avoid the rush, the CBDT may consider the extension of due date in furnishing of ITR," said Naveen Wadhwa, director general manager, Taxmann, an e-filing intermediary.
According to CBDT, “More than 1.38 crore (13.8 million) taxpayers have already filed their returns by using the utility released till date (16 July)." But given that there are about 85 million registered users on the income tax e-filing website as on 30 June 2019, a lot are still to file ITR. “Changes and extensions can be better planned and this could have been announced along with extension of Form 16 due date. It helps avoid last-minute confusion," said the expert who spoke on the condition of anonymity.
Whether the deadline gets extended or not, you should file your ITR as soon as possible to avoid last-minute glitches. Remember that if you don’t file the returns within the deadline, you will need to pay a penalty at the time of filing.