The Income Tax Department has provided much-needed relief to taxpayers by extending the deadline for filing audit reports for the financial year 2023-24. Citing the difficulties faced by taxpayers in electronic filing, the deadline has been extended by seven days from the original date of September 30, 2024, to October 7, 2024.
This move, announced through an official circular, aims to ease the burden on taxpayers and chartered accountants struggling with the complexities of the tax filing system, particularly the e-filing process.
Reasons for the Deadline Extension
The extension comes in the wake of widespread issues reported by taxpayers and tax professionals regarding the electronic submission of audit reports on the Income Tax Department’s portal. The circular from the department stated that considering the challenges and technical difficulties faced by users, the extension was necessary to ensure compliance and prevent last-minute errors or system crashes.
Rajat Mohan, Executive Director of Moore Singhi, explained that technological glitches and a surge in filings created a stressful situation, leading the government to extend the timeline. He remarked, “The load of filings is quite high on the portal in the last few days, throwing the entire ecosystem into a frenzy. The government should either upgrade the system to handle such rush or stagger the timelines for tax filings.”
New Deadline for Tax Audit Reports
The new deadline of October 7, 2024, applies to all taxpayers required to submit their tax audit reports for the assessment year 2023-24. This includes individuals, companies, and other entities obligated to get their accounts audited under the Income Tax Act. As a reminder, taxpayers must file their audit reports electronically on the Income Tax Return (ITR) portal.
The extension offers a short yet valuable grace period for those who were rushing to meet the original September 30 deadline. Chartered accountant Ashish Niraj, Partner at A S N & Company, emphasized the importance of this extension, stating, “All assessees who are required to get a tax audit done – including individuals, companies, and other entities whose ITRs are due by October 31 – can now upload the audit report by October 7, 2024.”
Consequences of Missing the New Deadline
Filing a tax audit report after the deadline can lead to severe financial penalties. As per current regulations, taxpayers who fail to submit their audit report by the due date may face a penalty of Rs 1.5 lakh or 0.5% of total sales or turnover, whichever is lower. This makes timely compliance essential for avoiding penalties and legal complications.
The extension has provided temporary relief to taxpayers and professionals alike, but it also serves as a reminder of the importance of timely tax compliance. For those who have not yet filed their audit reports, this extension is an opportunity to complete the necessary steps without rushing or risking penalties.
Challenges with the E-filing Portal
One of the primary reasons behind the deadline extension is the technical difficulties many taxpayers experienced while using the Income Tax Department’s e-filing portal. These issues have been prevalent in recent years, especially during peak filing times, as the system often struggles to handle the volume of submissions.
Tax professionals have pointed out that the portal’s infrastructure needs to be upgraded to accommodate the increasing number of taxpayers filing online. Rajat Mohan’s suggestion of staggering tax filing deadlines or enhancing the system to manage high traffic better reflects the sentiment of many in the financial community.
This is not the first time the Income Tax Department has had to extend filing deadlines due to system overload. The department has consistently worked to improve the portal, but the challenges of handling a large number of filings in the final days remain a significant concern.
Expert Opinions on the Extension
Several tax experts have welcomed the deadline extension, noting that it provides much-needed relief to both taxpayers and professionals. Deepak Chopra, Chairman of the Direct Tax Committee of the Karnataka State Chartered Accountants Association (KSCAA), confirmed that the extension applies to all taxpayers who were liable to submit their audit report by September 30, 2024.
Chopra added that the extension would allow professionals to ensure the accuracy of the audit reports, which is crucial for avoiding errors that could lead to penalties or further scrutiny from tax authorities.
Key Takeaways for Taxpayers
The deadline extension offers taxpayers a short reprieve, but it’s essential to use this additional time wisely. Here are some key takeaways for taxpayers:
- Don’t Delay: While the extension gives an extra seven days, it’s important to file the audit report as soon as possible to avoid last-minute issues with the e-filing portal.
- Accuracy is Key: Ensure that all audit reports are prepared and filed accurately. The penalty for errors or late submissions can be substantial.
- Technical Preparation: If you’ve experienced issues with the portal, make sure to address them early by consulting a tax professional or exploring alternative methods of submission.
The extension of the tax audit report submission deadline to October 7, 2024, offers a brief but valuable window of time for taxpayers to complete their filings. This decision by the Income Tax Department acknowledges the technical challenges of electronic filing and provides relief to taxpayers facing these difficulties. Nonetheless, it is crucial for taxpayers to act promptly and ensure that they meet the new deadline to avoid penalties and ensure smooth tax compliance.