27% individual income taxpayers surveyed yet to file their FY-23 income tax return; 14% say will not be able to meet deadline

July 28, 2023, New Delhi: Heavy monsoon and floods in July have hit lives in several parts of India. Be it floods leading to landslides in Assam, Himachal Pradesh and Uttarakhand or excessive rains in Telangana, parts of Gujarat and Maharashtra or displacement of thousands in Delhi NCR due to Yamuna banks and surrounding areas getting flooded, India is experiencing a very unusual July.

Many of the above states have not only faced floods and water logging but as a result power outages for long hours and in some areas for days. Life and work of hundreds of thousands is yet to come back to normal. Unfortunately for many these disruptions have meant not being able to file their income tax returns by the end of July as required. As the deadline approaches many have shared concerns on social media and the LocalCircles platform about being unable to meet the deadline for filing individual income tax returns.

Revenue Secretary Sanjay Malhotra last week stated that an extension of July 31, 2023 deadline for filing income tax return for financial year 2022-23 was unlikely and tax-payers should rush to complete filing their income tax returns before the deadline. To understand the status of returns filing, LocalCircles reached out to citizens across the country via a national survey. The survey received over 12,000 responses from citizens located in 315 districts of India. 68% respondents were men while 32% respondents were women. 41% respondents were from tier 1, 32% from tier 2 and 27% respondents were from tier 3, 4 and rural districts.

14% of individual income taxpayers admitted that they will not be able to meet the July 31 deadline; 27% yet to file their return

The survey asked the question “How are you positioned to be able to file your individual income tax return for FY 2022-23 by the current deadline of July 31, 2023?” Of the over 12,000 who responded to this query 27% admitted that they are still to file their income tax returns. The data shows that while 7 in 10 have already filed their income tax returns; 5% of the respondents have tried but had difficulty in filing and will try again to file by July 31; 8% of those surveyed admitted that they haven’t filed their returns yet but will comfortably do so before month end; 5% admitted they haven’t filed it and it will take a significant effort to do so before the deadline and 9% indicated that it will be impossible for them to file the income tax returns by July 31. In effect, 14% of respondents admitted that they will likely be unable to file their income tax returns by the deadline.

In summary, this year because of extreme weather conditions across 7-8 states and its impact on the lives of some, the survey finds that it is likely that 14% individual income taxpayers will be unable to meet the July 31st deadline for filing income tax returns. The feedback from people in community discussions on LocalCircles indicates that the Government should consider granting just a two-week deadline extension as that will give time to many income taxpayers in the flood affected states to do the needful as the situation on ground normalizes a bit. Alternatively, the Government could consider giving deadline extension to residents of just those states. LocalCircles will share the findings with the Ministry of Finance leadership so an appropriate and timely decision can be made on the matter.