The Central Board of Direct Taxes (CBDT) has extended the deadline for furnishing the tax audit report from September 30 to October 21.
The deadline for filing the corresponding income tax return has also been pushed back by 21 days, from October 31 to November 21.
The two extensions are linked but apply to separate compliances: the tax audit report must be furnished by October 21, while the income tax return for the affected taxpayers will now be due by November 21.
Who gets more time?
The relief is primarily for taxpayers whose accounts are required to be audited under the Income Tax Act, including eligible businesses and professionals.
For such taxpayers, the audit report is an important step preceding the filing of the return. The additional time can therefore help taxpayers and their advisers complete the audit, reconcile financial information and address discrepancies before filing.
Taxpayers who are not subject to tax audit are not covered by this particular extension. Their applicable deadlines remain unchanged.
Why was the deadline extension sought?
Tax professionals had been seeking more time, citing the compressed period available for completing audits and filing returns after the earlier compliance cycle.
Sumeet Hemkar, Partner, Deloitte, said the extension for taxpayers subject to tax audit but not subject to transfer pricing is a welcome relief and follows extensive representations from industry.
According to Hemkar, taxpayers and professionals have been dealing with sizeable and time-consuming reconciliations between income tax data, GST records and accounting information, which are necessary for more accurate filings.
He also pointed to September being a month with several compliance deadlines. Festival holidays and banking disruptions, coupled with the extensive workload, had made it difficult for taxpayers and professionals to meet the earlier timelines.
How can the additional time help?
The extra window can give businesses more time to complete their audit work and resolve discrepancies instead of rushing to meet the earlier September 30 and October 31 deadlines.
Amit Agarwal, Senior Partner, , Nangia & Co LLPsaid the extension shows that the CBDT has taken cognisance of the challenges faced by taxpayers and tax professionals during the current compliance cycle.
Agarwal said the additional 21 days would provide businesses and professionals with more time to complete tax audits, undertake necessary reconciliations and ensure that information reported in the tax return is accurate and appropriately supported.
For taxpayers, this means the additional time can be used to verify figures across their books and relevant tax records, identify mismatches and make corrections where required before the final return is submitted.
-With PTI inputs