49% of India's taxpayers yet to file ITR; 29% struggle to meet July 31 deadline: Survey

As the July 31 deadline for filing Income Tax Returns (ITR) approaches, 49% of taxpayers are yet to file their ITR for the 2023-24 financial year, citing issues with the income tax portal as the reason for the delay, according to a recent survey by LocalCircles. Besides, 29% of taxpayers express difficulty in filing by July 31.

The survey notes that over 4 crore returns have been filed, according to the Income Tax Department, as of July 22, representing an 8% increase from the same period in 2023. While time constraints and obtaining necessary documents were common problems, the primary issue was navigating the tax portal. Taxpayers reported problems such as system glitches, slow response times, and data discrepancies.

It states that specific issues included login failures, unresponsive pages, timeouts, problems with pre-filled data, and difficulties uploading large files. There were also reports of inconsistent calculations for capital gains and foreign income tax, and instances where filings did not appear in records after submission. With just a few days remaining before the deadline, many taxpayers have taken to social media to voice their frustrations and request an extension.

Various chartered accountant associations, including the Institute of Chartered Accountants of India (ICAI) and the Karnataka CA Association, have formally requested the Income Tax Department to resolve these technical issues and extend the filing deadline.

The survey asked participants how they were positioned to file their individual income tax returns for FY 2023-24 by the current deadline of July 31, 2024. Out of 19,865 respondents, 48% said they had already filed their returns; 4% reported encountering difficulties but planned to try again; 16% said they would comfortably file before the deadline; 18% anticipated it would be a significant effort; 11% believed it would be impossible to file by July 31, and 2% did not provide a clear answer.

Given that 40% of those yet to file cited portal issues as their main obstacle, the Income Tax Department may need to consider extending the filing deadline to August 15 or August 31, 2024, if the portal issues are not resolved soon.

The number of daily filings peaked at over 1.5 million on July 16, and this trend is expected to continue as the July 31 deadline approaches. Taxpayers are submitting their returns earlier this year compared to last year. Significant milestones were reached on June 23rd, July 7th, and July 16th, with 10 million, 20 million, and 30 million ITRs filed on these dates, respectively.

The survey received over 38,000 responses from taxpayers located in 311 districts of India. 69% respondents were men while 31% respondents were women. 43% respondents were from tier 1, 26% from tier 2 and 31% respondents were from tier 3 and 4 districts.