Taxpayers may get more time to file ITR after problem in ITR-2 reported to CBDT

After extending the due date of filing Income Tax Return (ITR) by months in the last two assessment years – mainly due to the COVID-19 pandemic – the Income Tax Department this time is trying to put the things in place by sticking to the original due date of July 31, 2022, even as the Central Board of Direct Taxes (CBDT) is closely monitoring the ground situation before taking any decision on ITR due date extension.

While the CBDT has found no merit in the argument that a section of taxpayers are confused as the due date of filing return for the current Assessment Year (AY 2022-23) comes within seven months of the extended due date of the last year (AY 2021-22), which was extended till December 31, 2021, the Department may consider a date extension after a problem in ITR-2 has been reported to it.

The problem surfaced when the attempts to validate ITR-2 of a senior citizen taxpayer – drawing regular income through systematic withdrawal plan (SWP) in debt-oriented mutual fund (MF) schemes along with investments in senior citizen schemes – failed before submission of the return online on the income tax portal on July 30, 2022.

While the validation errors in the Tax Paid page were resolved, those in the Schedule Capital Gain page were not. Despite entering quarter-wise information on short-term capital gains on sale of debt funds repeatedly in Section F of the page (information about accrual/receipt of capital gain) the online tax filing utility failed to add the figures to calculate the total gains to match with the figures in the Schedule BFLA page.

The issue was brought to the notice of CBDT at around 11.30 pm, following which, the CPC tried to guide the taxpayer through an online meeting around midnight, but – probably realising that it's not a case of entries in wrong places – dropped the idea. The attempts to communicate with the CPC team failed after cancellation of the online meet.

As the problem was not solved even in the morning of July 31, 2022, which is incidentally the due date of filing return, it is likely that the government would extend the due date to provide more time to taxpayers to file their return after the issue gets resolved.