Taxpayers may get 1 month more for returns submission

Holders of a tax identification number (TIN) may get an extra month to file their income tax returns, due to the novel coronavirus pandemic.

The National Board of Revenue (NBR) is awaiting the issuance of a special notification after having completed the legal preparations for this purpose.

However, the revenue authority may declare it, instead of time extension, as a scope for waiver of possible interest and fines on taxpayers.

They may issue a directive in this regard on the upcoming 30 November or 1 December, multiple NBR sources confirmed.

If that is the case, taxpayers will be able to file returns without interest and penalties till 31 December this year.

Experts have hailed the initiative by the NBR during the pandemic, saying this opportunity will give some relief to taxpayers.

Ahsan H Mansur, executive director of the Policy Research Institute (PRI) – a local private research institute –  said the time for filing returns should be extended this time considering the crisis situation.

"Taxpayers will get some relief if they get a waiver of interest and fines on taxable money for one more month," he said.

An official of the NBR's income tax wing told The Business Standard that, under the income tax law, there is no direct opportunity to extend the returns filing period beyond 30 November.

However, the President, after the Covid-19 outbreak in the country, issued a special ordinance, allowing a special crisis moment during the nationwide lockdown. According to that ordinance, the NBR can waive any fine and interest of individual taxpayers, the official also said.

Following the ordinance, the NBR is preparing to waive the fine and interest on taxpayers for one more month, instead of extending the time, under Section 184(g) of the Income Tax Act. However, everything will be finalised after the 30 November deadline, the official added.

According to the law, the deadline for filing income tax returns for the 2020-21 assessment year will end on Monday.

According to the Income Tax Ordinance, tax officials will impose a penalty of 50% and late interest of 2% per month on the taxable money if taxpayers fail to file returns within the stipulated schedule.

Many taxpayers have not been able to complete their necessary banking work related to taxpaying as many were in quarantine due to the novel coronavirus. Many were not even able to collect all the necessary documents.

Against this backdrop, professionals of various categories, including businessmen and income tax lawyers, wrote to the NBR demanding an extension in time for filing returns.

However, NBR Chairman Abu Hena Md Rahmatul Muneem, in early November, said they had no direct opportunity to extend the deadline under the income tax law after providing the facilities through holding tax fairs in different tax zones.

"There is no opportunity to extend the time for filing returns under the income tax law. If a taxpayer is unable to submit returns by 30 November, they can apply to the relevant tax zone and get an extra time of two months to do so," he told the media.

At present, there are 46 lakh TIN holders in the country. This year, the NBR has made it mandatory for all TIN holders, except three categories, to submit their returns.

Those who have no permanent residence in the country or have obtained a TIN to sell land or get a credit card need not file returns.

However, if anyone except these three categories fails to file returns, they can get an extended time of two to four months from the NBR by presenting logical reasons.

In neighbouring India, too, the deadline for returns submission was set to end on 30 November. But this time, the Central Board of Direct Taxes of India said in October that the taxpayers of that country would be able to file their returns for another month till 31 December, thanks to the pandemic.