REPRESENTATION FOR EXTENSION OF INCOME TAX RETURN FILING DATE OF 31ST JULY 2019

                   

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To,                                                                                                                   Dated :- 20/07/2019
Hon’ble Smt Nirmala Sitharaman,
Union Minister of Finance
Government of India
New Delhi

Respected Madam,

Subject: Representation letter for extension of date of income tax return(Individual) for AY 2019-20

CHANDIGARH CHARTERED ACCOUNTANTS TAXATION ASSOCIATION (In short ‘CCATAX or the Association’) is an association of Chartered Accountants, is a part of CHANDIGARH CHARTERED ACCOUNTANTS ASSOCIATION registered under the TRUST ACT .CCATAX is primarily formed for the welfare of Chartered Accountants and represents before various income tax authorities to resolve the professional problems faced by chartered accountants. CCATAX regularly conducts seminars, conferences, work-shops, study circle meetings of professional interest for members and public. The Association also conducts Endowment lectures. the main objects of CCATAX is Inspired by the ideology to have a common platform for all those who practice in taxation laws, irrespective of their individual affiliations and to enable them to share the benefits of their learning, experience and knowledge, eminent professionals from the fields of Direct Taxes

The due date of filing tax returns for AY 2019-20 is 31^st July, 2019. Ideally, the tax return forms should be available to the tax payers on 1^st April so that if he/she wishes to file his/her tax return on 1^st April, he/she can file the same. ITR forms being changed every year and its undesirable.  This in turn leads to delay in making available the government utility to tax payers. With almost all tax payers now having to mandatorily file their return online, there is no option but to wait till the CBDT makes available the ITR forms and the utility on the e-filing site. We have witnessed delays in this matter on the part of the CBDT.

However, the pain that is now being faced by tax payer is therefore we are constrained to write this letter to you.

There are so many changes in the forms. This year, the long term capital gains (LTCG) on transfer of listed shares and units of equity oriented mutual funds have become taxable for the first time since 2004.There is a concept of grandfathering clause provided in the Income-tax Act, for calculating the LTCG. This being the first year of taxation of the LTCG (after a gap of almost 14 years), most tax payers are struggling with the computation. There was an error in the utility and that fact was confirmed  by an officer at the CPC in Bengaluru. You will be shocked to note that this bug in the utility was rectified as late as 11^th July, 2019. Last date for filing the returns is 31^st July.  

To summarize the hardships that tax payers and tax professionals are facing:

1.  ISIN required to claim capital gains exemption

Mentioning the additional details of ISIN (International Securities Identification Number, a 12-digit alphanumeric number that is assigned to every security) number being asked for a security where the tax-payer books long-term capital gains,

Several tax payers had been ready with their computations and return of income but could not file the returns because they had long term capital gains and the government utility was giving errors in the calculations.

Now, on 11^th July, when the new version of the pre-filled utility was made available on the e-filing site, tax payers were shocked to learn that there was a new requirement in the utility. The Schedule 112A for furnishing details in respect of long- term capital gain transactions u/s. 112A, has been updated suddenly to provide the ISIN code/Folio No. with respect to shares/unit sold

Further there is again updation in the form by made on 19^th July 2019. Which is as follow, by amending for either enters scripwise details or not.

Schedule 112A and 115AD(1)(iii) of long term capital gain are provided in the Income Tax Return software as per the Instructions to the Notified ITR form and based on taxpayer feedback.Taxpayers have an option to either enter the Scrip wise details of long term capital gains in Schedule 112A and 115AD(1)(iii) so that the correct values are populated cin the CG Schedule or enter the self-calculated aggregate value of long term capital gains directly under respective items in schedule CG in terms with Sec 112A or 115AD(1)(iii) without entering scripwise details. Taxpayers may exercise either option based on their convenience

2. Delay in release of ITR form utilities and revisions in the schemas

. 

16/07/2018

Central Board of Direct Taxes (CBDT) has said today that no changes have been made in any of the Income-tax Return (ITR) forms including ITR-2 and ITR3 since the notification made on 1st April 2019, i.e. on the 1st day of the Assessment Year 2019-20. There were reports in social media that the taxpayers were facing difficulties in filing return of income in ITR-2 & ITR-3 due to large scale changes in the ITR form on 11th July, 2019.

The utility for e-filing ITR-2 and ITR-3 was released on 2nd May and on 10th May 2019 respectively

11/07/2019     
Download Prefilled XML is available for ITR 1, 2, 3 and 4 for AY 2019-20. For other ITR's it will be available shortly. 

07/06/2019     
CBDT extends due date for filing of TDS statement in Form 24Q from 31st May to 30th June,2019

The ITR 1, 2 and 4 were made available for the first time on 2^nd May, 2019. Thus, the whole of April is wasted and no body could file any returns in April.

ITR 3 was made available for the first time on 10^th May, 2019

ITR 5 was made available for the first time on 28^th May, 2019

ITR 7 was made available for the first time on 4^th June, 2019

ITR 6 was made available for the first time on 8^th June, 2019

3. Changes in utilities

 Effective AY 2018-19, a new section 234F was inserted vide Finance Act 2017, levying a fee for default in furnishing ITR. The fee ranges from Rs1,000, Rs 5,000 and Rs 10,000, depending upon the income and timing of filing return beyond the prescribed timeline. Even for delay of a day the taxpayer has to incur a penalty of Rs 5000, if the total income exceed Rs 5 lakh, else Ts 1000.

The utility is getting updated regularly. Once the forms are notified and final, such frequent changes, especially when it is made closer to the due date for filing the return of income is undesirable. A large section of tax payers avail the services of tax professionals who in turn use private return preparation software for finalizing the returns. It takes a lot of time and efforts to keep on updating these software to bring them in line with the income-tax utilities. Very often, taxpayers have prepared their return using a particular version of the utility but have not yet filed the return for some reason or the other (for example, someone could be awaiting the self-assessment tax challan.

4. Delays in Form 16s for salaried class

Usually, chartered accountants are done with filing salaried class returns by June. However, this year, the changes made to Form 16 and extension in filing TDS returns have ensured that several employees received Form 16, as late as July 10, 2019. “We couldn’t file returns in May-June as forms were notified late and salaried individuals didn’t receive their Form 16. In July, when we move over to business tax payers, we are still getting salaried individuals returns,”

5. TDS certificates not available with the tax payers & 26AS not updated: 

Most employers have not been able to furnish TDS certificates and even the 26AS of employees is not updated. This is delaying the process of filing the return of income.

Earlier, the due date for filing TDS statement for Q4 of FY 2018-19 was 31^st May but the same was extended to 30^th June, 2019 in case of TDS from salaries (Form 24Q). This was done because the format was changed at a late hour by the CBDT.

6. Penal provisions of section 234F of the Income-Tax Act, 1961

 Effective AY 2018-19, a new section 234F was inserted vide Finance Act 2017, levying a fee for default in furnishing ITR. The fee ranges from Rs1,000, Rs 5,000 and Rs 10,000, depending upon the income and timing of filing return beyond the prescribed timeline. Even for delay of a day the taxpayer has to incur a penalty of Rs 5000, if the total income exceed Rs 5 lakh, else Ts 1000.

7. The requirement of reporting of unlisted shares:

While reporting “general information”, the assessee is required to report the details of unlisted shares which are held by him. One of the fields in this section is for providing the PAN of the company whose shares are held.

In common  that there are thousands of other companies which were, once upon a time, listed on stock exchanges and which have, over the years, disappeared completely. Shareholders have lost crores of rupees worth of investments because of such companies. They are not even able to trace the companies. How would they be able to find out the PAN of such companies? And if this information is not provided, the return could be treated as defective.

With utmost request, we feel that this requirement is unfair and completely tax payer unfriendly.

These are some of the major and important issues which have been highlighted for your kind attention.

We request you to kindly look into these matters and to provide a solution to tax payers and extend the date upto 30^th September so they can peacefully file their tax returns in time

We hope that you will understand and consider the complications faced by assesses at large and extend the date upto 30^th September.

We look forward to your response in the matter.

Thanking you,

Yours sincerely,

CA Manoj Kohli

(General Secretary)