New Delhi - The income tax department of India has announced an extension of the deadline for filing audit reports for the financial year 2023-24. The new deadline now falls on October 7, 2024, pushing it back by seven days from the original date of September 30, 2024.
This extension is primarily due to the challenges taxpayers have faced with the electronic filing of various audit reports under the Income Tax Act. The Central Board of Direct Taxes (CBDT) issued this circular, stating, "On consideration of difficulties faced by the taxpayers and other stakeholders in electronic filing of various reports of audit under the provisions of the Income-tax Act, 1961 (Act), the Central Board of Direct Taxes (CBDT), under Section 119 of the Act, extends the specified date of furnishing of the audit report... to 07th October, 2024."
Rajat Mohan, Executive Director of Moore Singhi, emphasized the technological hurdles encountered during the filing process. He noted, "The load of filings is quite high on the portal in the last few days, throwing the entire ecosystem in a frenzy. The government should either upgrade the system to handle such rush or stagger the timelines for tax filings."
This situation highlights the increasing reliance on technology for tax compliance and the palpable concerns of taxpayers attempting to navigate the e-filing system. Many individuals and businesses are expressing frustrations over repeated crashes and delays when attempting to upload necessary documents to the online portal.
The new deadline applies to various assessees covered under Section 139 of the Income Tax Act, which mandates certain categories of taxpayers to submit mandatory audit reports. Specifically, businesses with sales exceeding Rs 1 crore and professionals with income over Rs 50 lakh per year are required to complete this audit.
Tax audits serve as significant mechanisms for ensuring transparency and compliance within the tax framework, acting as reviews of financial statements from both business and professional entities. They help to simplify the process of income computation, aiding taxpayers when they file their annual income returns.
Should taxpayers fail to meet the extended deadline, they may face penalties. The penalty imposed can be either 0.5% of total sales, turnover, or gross receipts, capped at Rs 1,50,000. That said, if reasonable cause is demonstrated for such failures, taxpayers may avoid penalties under Section 271B of the Income Tax Act.
The process of submitting the tax audit report remains straightforward, albeit occasionally fraught with challenges, especially under tight timelines. Taxpayers must follow several steps to complete this submission:
- Ensure the auditor has finished the audit, confirming completeness and accuracy of details.
- Log onto the income tax e-filing portal with the appropriate credentials.
- Navigate to the section designated for uploading audit reports.
- Select the correct assessment year for the report during submission.
- Adhere to instructions for uploading all required audit documentation, including Forms 3CA/3CB and 3CD.
- Confirm the successful submission of the report via the portal notifications.
With the looming deadline of October 7, taxpayers are being urged to act swiftly to avoid the last-minute rush, which could lead to complications and potential delays.
This latest move by the income tax department seems to reflect the government's acknowledgment of the pervasive challenges posed by technological dependencies, especially during peak filing seasons. The extension reflects not only the need to alleviate current pressures but also the larger issue of creating more sustainable, efficient systems for taxpayer compliance.
Whether this extension will be sufficient to ease the public's concerns remains to be seen, as many continue to advocate for improved infrastructure to support e-filing across all levels.
Meanwhile, the department will be conducting special drives to address taxpayer grievances, scheduled for October, particularly focusing on regions such as Jammu and Kashmir, which have faced unique challenges.
