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The income-tax returns filed for financial year 2017-18 has dipped by over 60 per cent in April 2018, but neither the IT Department nor the Centre is unduly worried.
A senior IT Department official said the decline was mainly due to two reasons — changes in the time limit for filing return, and availability of online facility for just one ITR (ITR 1). According to him, the change in the time limit will bring some discipline among the taxpayers and will eventually smoothen the processing of returns. That explains why the Department is not excessively worried about the decline in number of returns filed last month.
No room for old
“The number of returns dipped in April as no old returns can be filed after March 31. Hence, all the returns filed in April are fresh ones and for assessment year 2018-19,” the official said, adding that there is further time for filing returns.
Electronic return filing data show that nearly 4.27 lakh assesses filed their IT returns in April itself for financial year 2017-18 and assessment year 2018-19. In April 2017, 10.84 lakh filings had been made, which translates into a 60.58 per cent decline YoY.
Online facility
Amarpal S Chadha, Tax Partner & India Mobility Leader with EY, said that for financial year 2016-17, the online filing facility for ITR-1, 2, 3 and 4 were released in April 2017. For financial year 2017-18, it has been released only for ITR-1, which could be a reason for the decline in filings.
Individuals, including salaried persons and whose accounts do not need to be audited, are required to file their tax returns by July 31. Individuals and companies whose accounts have to be audited can do so till September 30.
Earlier, assesses used to get up to two years from the end of the financial year to file or revise the return.
Now, barring some exceptions, the time available to file or revise IT return has been limited to the end of the assessment year (March 31, 2019 for FY 2018-19).
According to the new provisions, which came into effect on April 1, if the return is furnished after the due date of filing (July 31 and September 30) but on or before December 31, it will attract a fee of ₹5,000. This will increase to ₹10,000 if the return is filed between January 1 and March 31.
However, if the total income of the person does not exceed ₹5 lakh, the fee will not exceed ₹1,000.
Effective managment
“This reduction in the time limit may help the revenue authorities to effectively manage and expedite the processing of tax return,” EY’s Chadha said, adding that the move will ensure sufficient time for the IT authorities to close scrutiny assessments.
On the other hand, it means the taxpayers will now have a limited window to file or revise their tax return.
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