Every year during the month of July, a tug of war erupts between tax professionals and tax authorities. Tax professionals — acting on behalf of taxpayers — seek an extension of the due date for filing returns of income, and the authorities, more often than not, refuse at the very first instance.
Year after year, professional associations are compelled to make formal representations seeking extensions. These requests are either rejected outright or kept pending, with relief announced only at the very fag end of the deadline — in several instances, at the stroke of midnight. In some cases, taxpayers and professional bodies have had to knock on the doors of High Courts to obtain relief, which is both unfortunate and avoidable. What is even more disheartening is that tax professionals are treated as adversaries in this process, rather than as partners in compliance.
One genuinely wonders: have taxpayers and tax professionals become lazy, or is there a deeper, systemic reason behind this annual battle?
The answer requires no rocket science — it lies in a simple sequence of events that precedes the filing of every return of income:
- On or before 31st May, all deductor across the country are required to file their quarterly TDS statement (TDS Return) for Q4 of the financial year, i.e., for the period January–March.
- On or before 31st May, a large number of entities — including banks, post offices, and dividend-paying companies — are required to file their Annual Return of Specified Financial Transactions (SFT).
- TDS Return data and SFT data typically start reflecting in the Annual Information Statement (AIS) of taxpayers only around 15th June — a full six weeks before the filing deadline.
- The CBDT begins releasing ITR filing utilities from the 1st–2nd week of May. However, as long as TDS and SFT data remain un-updated in the AIS, taxpayers are neither able nor willing to file their returns as it is too risky to do so.
- Once the filing season begins in earnest, bugs and glitches in the utilities surface rapidly. Updated versions continue to be released almost daily, right up to 31st July.
- In practice, taxpayers and tax professionals are left with barely 4 to 6 weeks within which over 6.5 crore returns — out of a total of approximately 8 crore — must be filed.
- During this compressed window, tax professionals across the country burn the midnight oil. And yet, unforeseen events — heavy rainfall, natural calamities, delays in utility releases, or time lost in fixing bugs — further erode the already insufficient time available.
Instead of addressing this root cause, the authorities have chosen to introduce yet another due date — 31st August — for taxpayers having business income but not subject to audit. Far from solving the problem, this will only aggravate it further, leaving tax professionals with barely one month to complete their tax audits after the non-audit filing season closes.
Furthermore, maintaining two separate dates — 30th September for filing the Tax Audit Report and 31st October for filing the corresponding return of income — does not serve any practical purpose. Ask any tax professional and they will tell you that tax audit and tax computation are a simultaneous exercise; you do not need a separate month merely to file the return once the audit is complete. However, granting additional time for the audit itself — given the enormous volume of data verification, compliance work, and reporting obligations involved in finalizing a tax audit — is a genuinely sensible reform.
The conclusion is clear: no one is lazy here — time is the constraint, and the constraint is built into the very design of the system.
It is high time that someone in the Finance Ministry takes serious note of this ground reality and acts on it. Some practical, implementable measures are suggested below:
- Prepone the due date for TDS Returns (Q4) and SFT Returns — in consultation with stakeholders — first to 15th May, and progressively to 30th April.
- Ensure all ITR filing utilities, across all forms and versions, are fully functional and bug-free by 30th April at the latest.
- Ensure that TDS and SFT data is processed and reflected in taxpayers’ AIS within 2–3 days of the respective filing dates — not weeks later.
- Merge the due date for filing the Tax Audit Report and the corresponding return of income into a single date of 31st October, while simultaneously extending the tax audit report deadline — thereby giving tax professionals the breathing space they genuinely need.
With the number of taxpayers growing year on year, this issue will only intensify with each passing year. The rollout of the new Income Tax Act and the new Income Tax Rules will make the filing of returns for F.Y. 2026-27 an even greater challenge for all stakeholders. The authorities need to fix this systemic gap at the earliest — and when they do, it will amount to nothing less than a meaningful tax reform.
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