A large number of small businesses claim that they would not be able to abide by the income tax deadlines and want the government to extend it, a LocalCircles survey has found.
As per the survey 41% of small businesses have said that it would be impossible for them to file income tax returns by December 31. The government has already extended the deadline for filing the tax returns due to the Covid pandemic.
LocalCircles conducted the survey to understand the pulse of taxpayers related to filing Income Tax Return by December 31, 2020. It also tried to understand small businesses’ position in filing their ITR and audit report for FY 19-20 by the given deadline. The individual taxpayers survey received more than 6600 responses while the small business survey received more than 2300 responses.
The last date for filing income tax return (ITR), which is usually on 31 July of each year, was extended due to Covid pandemic and subsequent lockdowns in the country. More than 4 crore ITRs for AY 2020-21 for individual tax payers have been filed till December 25, 2020. Failure to file ITR by 31 December 2020, could lead to a penalty of a minimum of 50% or a maximum of 200% of the assessed tax will be levied on the taxpayers, LocalCircles said.
“Small businesses have had a highly challenging year this year due to the COVID-19 pandemic with lockdown for the months of April-May and extremely slow period from June to August as economic activity and consumer demand was significantly impacted. It is only after September when signs of pick up in business activity emerged and for many small businesses it has been about recovering some of the accumulated losses from March to August this year. Also, for many small businesses, there is dependency on GST returns and business returns are typically more complicated than individual returns and for many of them, they require several sittings and information exchange with their accounting professionals which has become difficult due to the pandemic. Small Businesses are keen that the deadline be extended to Feb 28, 2021 and at the very least till Jan 31, 2021,”the survey said.
Source from: https://economictimes.indiatimes.com/news/economy/finance/about-40-small-businesses-say-its-impossible-to-file-tax-returns-by-month-end-want-extension-localcircles/articleshow/79977398.cms