The last minute rush is imposed on us!

July 31 brings apprehension and fear into the hearts of many honest taxpayers – it is suspected that dishonest taxpayers, anyway, are not subject to attacks of conscience. The reason for the apprehension, of course, is that July 31 is the deadline for filing proper tax returns by people earning income from wages or professions, not subject to verification. One is required, not only to pay his taxes honestly, but also to file a detailed declaration with a large amount of information, to allow the Central Office of Direct Taxes (CBDT) to verify his honest compliance.

Ministers and central government officials are quick to denounce the tendency of taxpayers to wait until the last minute before filing, adding unnecessary pressure from the system and personal stress. They are correct that human beings all over the world tend to procrastinate and only wake up when something can’t be delayed any longer. Is this the only reason for the last-minute tax filing rush? Far from there. Irrational and unnecessary CBDT regulations play a major role in last minute filing.

All taxpayers, and even those whose income exceeds the basic tax ceiling but who are not subject to tax, are required to file an appropriate tax return for the previous year, no later than 31 July of the following fiscal year. For a change, this year, the CBDT announced the tax return forms (ITR) as of April 2022.

Keep in mind that you cannot just assume that an ITR form used last year is valid and continue with your filing. Thanks to the ever-changing bureaucratic tinkering of the union budget and the like, the scope and layout of ITRs change from year to year.

One wonders why the CBDT waits until April 2022. After all, the RTI for FY2021-22 is mainly impacted by the 2021-22 budget which is announced on February 1, 2021!

Although some changes may be announced later, there is no reason why the CBDT should wait until April 2022, leaving only four months before the ITR filing deadline, to announce the appropriate ITR forms. use.

To make matters worse, while the ITR forms were announced in April 2022, the software utilities for the various ITRs (1-7) were released over the following two months and the CBDT continued to modify them from time to time. . Some changes have taken place until July 25, 2022 – barely a week before the deadline!

Can a taxpayer be blamed for being confused?

Until a few years ago, the CBDT used to publish the utility in MS Excel, which is familiar to many taxpayers; last year, without a word of explanation, they switched to a Java-based utility, which baffled taxpayers who had a hard time getting used to it. Why should CBDT not be required to release utilities by April 2022 at the latest, and no changes thereafter?

To file your ITR, it is essential to have in your possession forms 16 A and B issued by the employer. Although the fiscal year ends March 31, 2022, and most audits begin around that date, the CBDT generously allows employers to issue Form 16 A and Form B until June 15, 2022!

Why give the employer two and a half months to issue a form that only captures static data on payments and deductions over the course of the year, then insist that the dynamic data be completed by the taxpayer within a month and half ? Why not insist that Forms 16 A and B be issued by the employer no later than April 30, 2022, allowing ample time for the taxpayer?

Even Form 26AS, essential for the taxpayer to complete the ITR, is delayed by the CBDT. PAN numbers are quoted by the employer when deducting taxes, by companies and banks paying interest and dividends, etc. Yet the CBDT is very unconcerned with making the completed Form 26AS available to taxpayers.

As with Form 16 A and Form B, the CBDT kindly allows the filing of withholding tax (TDS) returns until May 31 of the following year, although full TDS details should be available soon. before. The TDS for any month is supposed to be filed by the debtor within seven days of the following calendar month. Thus, all amounts of TDS up to February 28 of the fiscal year should have been deposited before March 7 of the same year.

Only with regard to TDS during the month of March, the amounts can be deposited until April 30 at the latest. Why is that? Funds through TDS are the property of the central government and there is no reason to allow companies to take advantage of the float as working capital for 30 days.

Since companies can thus delay their TDS filing until April 30, they have a deadline until May 31 to file TDS declarations. Only after TDS returns have been filed and processed will Form 26AS be updated and made available to taxpayers! And it may be quietly updated by the CBDT at any time thereafter without notice to the taxpayer – so the final Form 26AS cannot be sure until perhaps mid-July.

See the disparity, then! We keep hearing about taxpayers waiting until the eleventh hour to file their income tax return; nothing is ever said about the CBDT making critical information available much later than it can or should. The balance of inconvenience is for the businesses deducting the tax and for the CBDT itself, not the harassed taxpayer.

Can we suggest a refinement in the system? As taxpayers, we are committed not only to filing our income tax return before July 31; we will do this well before the due date. In return, we ask that:

1. The ITR forms are issued by the CBDT at least by June 30th of the financial year concerned – any changes after this date must be made public and clearly explained;

2. Software utilities should be published by September 30 of the financial year concerned – any changes after this date must be made public and clearly explained;

3. Forms 16 A and B to be issued by the employer by April 30 of the following year;

4. Form 26 AS and AIS/TIS to be issued in final form by the CBDT by May 31st of the following financial year – any change after this date must be communicated to the taxpayer at the time of this change.

The above timelines will be fair to all involved, viz. CBDT, employers and taxpayers. Can we please have them from FY2022-23 which is AY2023-24? Madam Minister of Finance, you will greatly help honest taxpayers by doing this.

(Artha Shastry is a banker who wishes to remain anonymous.)

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