54% individual income tax payers yet to file return; 37% of them say difficult to do so by the deadline

July 21, 2022, New Delhi: More than 50 percent of those required to file income tax returns (ITR) for fiscal year 2021-22 by July 31, 2022, are yet to do so, shows a LocalCircles’ survey based on responses from 11,300 registered participants located across 306 districts of the country. Multiple circles on the LocalCircles’ platform have been buzzing with citizens raising issues about their inability to comply with the tax filing deadline. Almost 12 percent of the respondents claim it would be impossible for them to file the returns by the deadline while 25 percent shared that it would require significant effort. Among those who are yet to file the tax returns, 4 percent claimed to have tried to do so but faced difficulty, while 13 percent more hoped to do so over the next few days.

In all, so far 54 percent of the respondents are yet to comply with the requirement to file tax returns by this month's end, of which 37 percent remain uncertain if they will be able to meet the deadline. Just 46 percent of the taxpayers had filed their returns at the time of the LocalCircles survey.

54% individual income tax payers yet to file return; 37% of them say difficult to do so by the deadline

In the previous two years, the government extended ITR filing and other income tax-related deadlines due to the Covid pandemic and glitches in the newly launched income tax portal. On July 2, 2022, the income tax department tweeted on its official Twitter handle about the irregular traffic on its e-filing website (i.e., the new e-filing portal launched last year) due to problems being faced by the taxpayers. The tweet stated: "It has been noticed that taxpayers are facing issues in accessing ITD e-filing portal. As informed by @Infosys, they have observed some irregular traffic on the portal for which proactive measures are being taken. Some users may be inconvenienced, which is regretted."

The tweet reveals that even after a year of its launch, the new tax portal is still facing technical glitches. These include taxpayers not being able to login into their accounts, inability to see old ITR data, etc. However, so far there is no indication from the authorities of any plans to extend the deadline as many taxpayers have been banking on.

Late filing of tax return beyond 31st July (unless extended) may entail penal consequences such as additional interest liability u/s 234A and late fee u/s 234F of the Income-tax Act. Further, the taxpayer may face certain restrictions on set off and carry forward of losses. Experts have been advising taxpayers to file their tax returns early given the glitches.

LocalCircles will escalate the findings of this survey to CBDT for their consideration.