- Date : 25/07/2019
- Read: 3 mins
The extension for the last day to file ITR has arrived. Find out what may have triggered this year’s extension and also get the background information
The new deadline for filing of the income tax returns for the financial year 2018-19 is 31 August 2019. The finance ministry has extended the deadline from 31 July 2019. This is applicable for individuals and Hindu Undivided Families (HUF) who are not mandatorily required to get their books of accounts audited for tax purposes.
The extension is expected to be a relief for chartered accountants, tax practitioners and assessees who have been appealing to the government for it. The appeals were being made on the ground that various problems were being faced by the filers in their attempt to comply with the 31 July timeline.
The Central Board of Direct Taxes (CBDT) had extended the deadline for filing of TDS returns (24Q) from 31 May 2019 to 30 June 2019. With a late filing date made available to the employers, the deadline for issuing Form 16 was also pushed from 15 June 2019 to 30 June 2019. Filers like employees who are dependent on Form 16 for ITR filing, thus effectively had only 21 days to file the return.
Although Form 16 provides readymade information, time is also required to find out the sources and amounts of income from other sources. Besides, the prefilled XMLs doesn’t contain the salary details which is required in ITR-2. Another time-consuming affair is the calculation of the long-term capital gain tax on equity shares and equity mutual funds. The introduction of the grandfathering clause has further complicated this exercise.
The extension will save Rs. 5,000 in case of those assessees who would have otherwise failed to file their return by the 31 July 2019 deadline. The late fee will double in case someone delays beyond 31 December 2019.
How TDS returns affect the timing of ITRs?
TDS returns 24Q and 26Q are statements of tax deducted at sources for salaries and all payments other than salaries, respectively. It is generally after filing these TDS returns that an employer proceeds to issue Form 16 to employees. If an employee wants to file the ITR, he or she will have to wait for the information available in Form 16. Therefore, if there is a delay in the filing of TDS returns, there can be a cascading delay in the issuance of Form 16, thus leaving lesser time for the employees to file their ITR.
How to be ready for return filing so that the revised deadline is not missed?
One can prepare for filing ITR by keeping the following documents/information readily available,
- Form 26AS
- Interest certificates from banks and post offices
- Investment proofs and documents falling under sections like 80C, 80CCC, 80CCD(1), 80D to 80U
- Home loan statement from the lender
- Capital gain information
- Aadhaar Card
- Pre-validation of bank account for ECS refund
- Details of investment in unlisted shares
- Updated passbooks and salary slips
What is the grandfathering clause in equity mutual funds?
With effect from 1 April 2018, a 10% LTCG has been made applicable on equity mutual funds – provided the LTCG is over and above 1 lakh.
LTCG made till 31 January 2018 have been grandfathered and will remain tax-exempt. The higher cost of acquisition or NAV on 31 January 2018 will be considered for units purchased before 1 February 2018. This is, in short, the grandfathering clause, which is nothing but a legal provision. Accordingly, LTCG made after 31 January 2018 only will be taxed. Take this quiz to feel confident enough to file ITR online.