Mumbai. There are some topics, which confuse some employed people and small businessmen / businessmen, one such topic is ‘Income Tax’ because the Income Tax law has not been explained in the language of the common man. Because of this it becomes difficult for the common man to understand it. Whenever there is talk of income tax with the common man, the next thing that comes to his mind is to file the income tax return. Therefore, every year whenever the last date of return filing approaches, the concern of the taxpayers starts increasing. Because it is not easy for the common taxpayer to file the return. Secondly, the Income Tax Department also keeps on changing the rules.
New information is requested. Forms also keep changing. Apart from this, most of the taxpayers are active in filing returns only when the last date is very near and fill the returns in a hurry. Which also leads to mistakes. That is why the income tax portal gets ‘hang’ in the last two days and many taxpayers are unable to file the return. Then they have to pay the penalty unnecessarily. A penalty of Rs 5,000 has been imposed for non-filing of returns. And there are many other disadvantages of not filing the return. Therefore, it is wise to file returns well in advance to avoid worries and penalties. Every year 31 July is the last date, but due to the COVID crisis, this year the government has fixed 30 September 2021 as the last date for the assessment year 2021-22.
Taxpayers make these mistakes while filing returns
- Selecting the wrong form: While filing your ITR, you need to select the correct form, which is based on your income-category. If you choose the wrong form, you may not be able to provide the correct income details and as a result, the Income Tax Department may issue a notice to you for understatement or misrepresentation of income.
- Non-verification of Form 26AS and TDS certificates: Taxpayers should reconcile Form 26AS and TDS certificates with the income statement shown in ITR. Form 26AS contains all the details of your income, TDS, advance tax paid by you, refunds issued, specified financial transactions (such as property acquisition, cash payment of credit card bills etc.), Even if there is a discrepancy, the Income Tax Department can issue a notice.
- Not disclosing all sources of income: All income must be disclosed, whether the income is taxable or exempt. Many taxpayers miss out on reporting exempt income due to ignorance. Doing so can still be questioned by Income Tax officials.
- Workload on Income Tax Website: Due to the tendency of filing returns a few days before the due date, the workload on the Income Tax website increases and due to this the functionality of the website becomes slow or closed, due to which many taxpayers are filing returns. are deprived of doing.
Difficulties are coming in the new e-filing portal
Although in recent times, the Income Tax Department has tried to reduce the compliance burden on the taxpayers and at the same time the department has also taken some steps to reduce tax evasion. The launch of the new taxpayer friendly e-filing portal www.incometax.gov.in is the biggest example of this. With the same objective, a new taxpayer friendly e-filing portal was launched on 7th June, 2021 to ease the return filing process, speedy refund process etc. However, the new portal The start has been made in the larger interest of the taxpayers, but due to some technical difficulties, the taxpayers are not getting the full benefit of it but are facing difficulties in filing the returns. Therefore, it is difficult for the taxpayers of the country to use the new portal. At present only ITR 1, 2 and 4 can be filed. The process of login/income tax statement filing on the new portal is taking more time than usual. The government should pay immediate attention to this. Is required.
interest liability problem
Another problem that some taxpayers are facing is the interest liability. Though the deadline for filing income tax return has been extended to 30 September 2021, interest will still have to be paid if the tax liability of the taxpayer exceeds the prescribed limit. 1% interest will be charged every month under section 234B (234B). In addition, the Income Tax Department has added new provisions in the Income Tax Act, to penalize taxpayers who do not file income tax details. As per these provisions, if the specified conditions are not fulfilled and income tax return is not filed, tax will be deducted at higher rate.
TDS credit is also a big problem
There is another problem before the taxpayers and that is TDS credit, TDS credit can be claimed by the taxpayers in the same year in which the relevant income is reported by the taxpayer. However, when the taxpayer claims the credit in the first year (i.e. the year in which the income for tax is reported in the income tax statement), the credit is not allowed while determining the income tax return, if the TDS statement is filed in Form 26 of the first year. Does not appear in AS and appears in subsequent years. In other cases, where TDS deductor has defaulted in filing or filing TDS return, the taxpayer is not able to claim credit of TDS in such circumstances.
It is said that to gain something one has to lose something. As a partner of nation building, I am hopeful that the issues relating to the problems of the taxpayers will be resolved soon by the Government and as expected by the Chairman of the Central Board of Direct Taxes (CBDT), “Taxpayers appreciate the efforts of the Income Tax Department. Will appreciate and will play a remarkable role by voluntarily becoming a partner in nation-building”. Taxpayers will be encouraged only when the problems are resolved. Also, taxpayers should not wait for the last day to file returns. Because in a hurry, sometimes mistakes can be made in filing returns and the action of the Income Tax Department may have to be faced.
-CA Sunil Patodia, Former President, WIRC-ICAI