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What are the 6 reasons for the delay in the ITR Filing?

The year 2020 has been eventful with the pandemic across the world. The flow of business and lives were heavily impacted. Work had to be stopped and people were restricted to their houses. Only the necessary businesses were allowed to operate under strict rules.

The impact on the business heavily affected the Income Tax Return of the people who were employed. There was a delay regarding the Tax filing during the pandemic. There was confusion regarding what to file for in the Income Tax filings.

Why was the Income Tax Filing delayed?

Income Tax Return is a form that people have to fill to inform the government of the financial details. It contains the financial details regarding his income, expenses, tax deductions, investments, taxes, etc. The direct tax return is filed on the various income sources such as that of:

  • One’s salary,
  • Profits and gains earned through business and profession,
  • Property,
  • Profit through capital gains,
  • Income from dividend, interest on deposits, royalty income, winning on lottery, etc.

The filing of the tax was delayed due to several reasons. Some of the prominent reasons for the delay of taxes were:

  • Change in Dates for ITR filing: Government has provided a sense of relief to the taxpayers by providing an extension in the dates for filing of Income Tax Returns for the FY 2020-21. This has led to the delay in the filing of the Tax returns which would normally get done by March 2021. This is all due to the Covid-19 Pandemic that has disrupted the flow in society.
  • Network and Website issues in ITR filing: This was a common issue as the government had updated the server and brought out a new portal for easier income tax filing. With the new portal, there were several glitches that led to creating confusion among the taxpayers. To solve the issue, the government decided to extend the dates.
  • ITR server issue: With the new portal the government asked the people to file tier tax returns online rather than file them physically. The easier accessibility made people rush to the portal to file their taxes soon as possible. This led to a heavier load on the server and it started malfunctioning. Due to the heavy usage, it kept crashing, making it difficult for the taxpayers to file their Income Tax returns.
  • Impact of Budget, 2021 on the ITR: With the latest amendments in the 2021 budget it has become confusing for the taxpayer to file for their ITR. Some of the prominent changes under the budget session were:
    • Increase in safe harbor limits for businesses or individuals in transactions.
    • Tax filing for those over 75 years of age has been removed.
    • The availability of pre-filled ITR forms to make compliance easier for taxpayers.
    • Contribution to EPF and its interest has been revised to benefit them.
    • The delayed period for filing ITR was reduced to incorporate the change in the situation of the Pandemic.
  • Change in Information for tax filings: There has been a rise in the number of applications for the correction of data on identity proof in recent years. The change in name, address, etc takes time and people filing for Tax returns need to furnish proof of identity while filing for tax returns. Thus a delay in the change of information will automatically delay the ITR filing process. This can also happen while changing banking details while filing for the Tax return.
  • Condonation in tax filing: There is a provision under the Income Tax act where the individual is provided with the provision to apply for a delay in ITR cause due to personal reasons. This is known as Condonation and it is applicable only when the reason for the delay is genuine. Thus personal reasons can be another reason for the delay in the Income Tax return filings.

Conclusion

Tax filing is an integral part of any economy of the nation. Without the tax payments, the county can not progress ahead. It is the tax that helps the government in building and maintaining public properties. A delay in the tax filing has a huge impact on the functioning of the government and is thus preferable not to delay it. There are various reasons for which there might be delays in the filing of the taxes which are sometimes within our control and sometimes not.

FAQ

  1. Why are my taxes still processing after 21 days?

Answer: There are various reasons for the delay in the processing of refunds after 21 days. The cause for the delay is often due to lack of information, incorrect information, theft, or fraud. These are some of the reasons among many others.

  1. What is the problem with the New Income tax portal launched in 2021?

Answer: There are multiple issues that have been reported with the new portal for filing Income Tax returns. Some of the major problems reported are that of glitches in information, the constant crashing of the page, slow loading, etc. These are all due to the heavy load on the website that was not anticipated.

  1. How do I submit income tax returns online?

Answer: One can submit their Income tax returns online by themselves through the government portal. They can also avail themselves of the services by agencies that take care of all the filing procedures at minimal fees. This saves both time and effort for the taxpayer.

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