49% taxpayers yet to file ITR; 29% say very difficult to file by July 31st deadline; Difficulties with ITR website cited as top reason

July 25, 2024, New Delhi: As the deadline for filing Income Tax Returns (ITR) for Assessment year (AY) 2024-25 approaches on July 31st, lots of taxpayers and tax professionals have been writing on LocalCircles and other social media platforms about encountering issues like login failures, unresponsive pages, timeouts, and problems reflecting pre-filled data and uploading large files. Inconsistent calculations for capital gains and foreign income tax have also been reported, as well as instances where filings were not reflected in records after submission. With just a few days left to file income tax return (ITR) by July 31, taxpayers are worried and have been using social media to air their difficulties in filing the returns and have been urging the government to extend the deadline. Several chartered accountant associations, including the Institute of Chartered Accountants of India (ICAI), Karnataka CA Association among other are reported to have formally written to the Income Tax Department about the various problems and sought an early resolution of the technical problems and extension of the deadline for filing the returns.

Responding to the crisis being faced by income taxpayers, LocalCircles has conducted a pan-India survey to find out where taxpayers stand on filing their tax returns and the issue experienced. The survey received over 38,000 responses from taxpayers located in 311 districts of India. 69% respondents were men while 31% respondents were women. 43% respondents were from tier 1, 26% from tier 2 and 31% respondents were from tier 3 and 4 districts.

49% income taxpayers surveyed yet to file return; 29% of them say difficult to file FY 23-24 return by July 31st

Seeking to know how individuals who must file ITR are faring, the survey asked them, “How are you positioned to be able to file your individual income tax returns for FY 2023-24 by the current deadline of July 31, 2024?” Out of 19,865 who responded to the question 48% stated that they had “done it already”; 4% stated that they “have tried but had difficulty in filing. Will try again and file by July 31, 2024”; 16% of respondents stated they “haven’t done it yet but will comfortably do before July 31, 2024”; 18% of respondents stated that they “haven’t done and it will be significant effort doing it before July 31, 2024”; 11% of respondents stated that it will be “impossible to file by July 31, 2024”; and 2% of respondents did not give a clear answer. To sum up, 49% of income taxpayers surveyed are yet to file the return; 29% of them say it will be difficult to file FY 23-24 return by July 31st.

4 in 10 who have not filed their ITR for 2023-24 cite difficulties with tax portal as the reason

The survey next asked taxpayers, “What are the different bottlenecks in filing your income tax return for FY 2023-24 by the current deadline of July 31, 2024?” Some among 18,139 respondents to the question indicated more than one reason for not being able to meet the deadline with 38% stating that they are “getting the tax filing portal to work (directly or indirectly}”; 38% stated that time is a constrain so they are “just getting to doing it amongst other priorities”; 14% of respondents indicated that they are still “getting Form 16 and other documents”; 14% stated that the “CA is reporting having difficulties”; 3% stated that they are “unable to get time with my CA” and 14% of respondents stated that there are “other issues” not mentioned. In essence, 4 in 10 who have not filed their ITR for FY 2023-24 cite difficulties with tax portal as the reason.

In summary, 49% of income taxpayers surveyed are yet to file their return for FY 2023-24 while 29% of them say it would be difficult to do so by July 31st. The main reason cited by 4 in 10 who have not filed their ITR for 2023-24 are difficulties with tax portal. Given the prevalence level of issues with the portal reported this year, unless something is likely to change within the next 48 hours on the portal stability front, the Income Tax Department may want to consider extending the filing deadline to August 15th or August 31st, 2024.

Survey Demographics

The survey received over 38,000 responses from taxpayers located in 311 districts of India. 69% respondents were men while 31% respondents were women. 43% respondents were from tier 1, 26% from tier 2 and 31% respondents were from tier 3 and 4 districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.