Many taxpayers faced late ITR filing for the 2023-24 financial year due to glitches on the ITR portal. Those who filed late and paid the applicable fees discovered that only the new tax regime was available to them
Chartered accountants have noted that this shift causes considerable difficulty for taxpayers, particularly those in salaried positions. Jainik Vakil, chairman of the direct tax committee at the Gujarat Chamber of Commerce and Industry (GCCI), stated, ‘The requirement to use the new tax regime for late filers has adversely impacted salaried taxpayers, depriving them of benefits like house rent allowance and other deductions available under the old regime. Consequently, taxpayers face a higher tax liability under the new regime, despite having TDS reported in Form 16 based on the old regime.’
GCCI has petitioned the Central Board of Direct Taxes (CBDT), requesting that the option to use the old tax regime be extended to late filers to preserve their access to deductions and exemptions. The GCCI’s representative argued, ‘Many taxpayers were unable to file their returns by 31 July 2024, due to unforeseen circumstances. Given that Form 16 is usually issued by June 15, taxpayers have a limited window to file their returns. We believe they should have until 31 December 2024, to file their returns under the old regime.’
The representation also highlighted that, while interest and penalties for late filing are acknowledged, the change in tax regime alters the basis for tax liability determination, leading to unintended financial consequences for taxpayers.
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