Why the ITR Filing Deadline Extension to 2 Months Makes Sense in a Pandemic Era

Due to the ongoing pandemic and the associated challenges in processing tax returns, the income tax return filing deadline has been extended by two months. This extension reflects the government's efforts to support taxpayers who have faced difficulties in both visiting tax experts and accessing digital filing systems. It also addresses the strain on IT systems during the final days of the filing period.

Current Challenges Facing Taxpayers

One of the primary reasons for the extension is the overload on digital filing systems, particularly during the last few days before the original filing deadline. This overload poses a significant problem as many taxpayers attempt to file their returns at the same time, causing server crashes and delays.

Economic and Technological Considerations

The extension aligns with the government's broader vision of digitizing and simplifying tax processes. Taxes are a crucial contributor to the economy, and the government feels a duty to ease the burden on taxpayers and simplify the tax filing process. However, the current system is heavily reliant on technology and still faces significant hurdles, especially during busy periods.

Impact of the Pandemic on Tax Compliance

The pandemic has caused numerous disruptions, including delays in account auditing and difficulty in accessing tax consultants. As a result, pressing to file returns by the original deadline can lead to incomplete or inaccurate filings.

Digitization and Simplification: A Long-Term Solution

The government is committed to making the ITR filing process more efficient and user-friendly. A potential solution is to automate the entire filing process, making it simpler and quicker for taxpayers. For instance, automated tax reports from banking software could significantly reduce the complexity and workload involved in filing taxes.

Automated systems could populate the necessary data based on various inputs, such as salary, profits, gains, and capital incomes. This would eliminate the need for extensive manual data entry and reduce errors. Additionally, a national asset-building fund could be introduced, encouraging higher contributions through a simplified digital platform.

The Way Forward

The current ITR filing system needs a complete overhaul, moving towards a more citizen-centered and efficient model. The Bharatiya Janata Party (BJP) has made significant strides in improving the tax system over the past six years. Further modifications could include:

Automatically populating ITR forms based on digital inputs. Increasing the threshold for manual filing. Facilitating easy payment options for the National Asset Building Fund. Integrating tax reporting into banking software for major commercial enterprises. Continuous digital infrastructure improvements to support seamless tax filing.

Implementing these changes would not only ease the burden on taxpayers but also improve the overall tax system, making it simpler and more user-friendly. This would contribute to a more efficient and effective economy.

As the government continues to work towards digital transformation, extensions like the recent ITR filing deadline are steps in the right direction. With the right support and reforms, the process can be streamlined to benefit both taxpayers and the national economy.