Both salaried individuals and companies i.e direct tax payers may require to file income tax returns two months in advance says the finance minister. The modification may bring the due date from 31st July to May 31st.
“For salaried and other individual taxpayers, it will not be a problem if the due date is advanced. But, it takes a lot of time for unlisted companies to finalise their annual accounts as chartered accountants first attend to the listed companies. Advancing the due date for unlisted firms may not be a practical move,” said Gaurav Taneja, national tax director, Ernst & Young.
For small businesses and firms that are not subject to tax audit, the filing date is proposed to be brought forward to June 30, instead of July 31.
The new filing date proposed for companies and partnership firms that are subject to compulsory tax audit is August 31, instead of October 31.
The proposal is a consequence of the income tax department’s field formations wanting to rationalise the time period for filing returns and refunds. Given that all companies and partnership firms have to file electronic returns compulsorily, tax officials said the time taken should be reduced correspondingly
The modifications is expected to be made in Budget 2008-09.
A finance ministry official says" “Even if it does not happen in this Budget, it will be done in due course after the system of e-filing of returns, started from 2004-05, stabilises,”
A change in the due date has also become necessary because since last year the tax department has to process corporate taxpayer returns mandatorily within 33 months from the date of filing instead of 36 months earlier.
This reduction is considered one of the main factors for higher direct tax revenue collections over the past two years since it allows the taxman to raise fresh tax demands and bolster annual revenue receipts in the last quarter of the financial year.
So we can just wait and watch both for the announcement of the modification and the reaction of the masses at large.