Income tax returns filing: Many reasons for govt to extend the deadline beyond 31 July this year

One of my favorite books of all time is Robert Cialdini’s Influence: The Psychology of Persuasion in which he highlights how one of the persuasion techniques to influence consumer psychology is to create a sense of urgency through time-based scarcity or possible penalty. “Urgency” suddenly seems a central plot when it comes to linking Aadhaar and PAN, especially since 31 July is the deadline to file your income tax returns. (Calculate your tax here)

Income tax returns filing: Many reasons for govt to extend the deadline beyond 31 July this year

For the beginners, through an amendment to the Income Tax Act this year, the government has introduced Section 139AA which has made it mandatory to quote the Aadhaar number for I-T returns filing after 1 July this year. It is mandatory to link your Aadhaar card to your PAN card to file your ITR, for those who have both numbers. The dictat seems to have created a sense of urgency among the tax payers (though the Supreme Court is still hearing the case related to privacy issues of Aadhaar) and they are panicking. The reason for their nervousness is that they are facing many problems while linking Aadhaar and PAN.

Problems while linking

For one, in many cases the two registries simply do not match. For instance, there are many cases where people have just mentioned their initials in their PAN. As opposed to this, they have expanded their initials in the Aadhaar card. In such cases, you cannot link the both identifications in one click. (Interestingly, there are exceptions. For instance, in my case, both got linked in a matter of seconds, though there were mismatches. Mysterious, indeed!) Again there are cases where date of birth do not match.

The way to resolve mismatch issues is by updating either Aadhaar or PAN. This is taking time for many. Chances are many will not be able to get it fixed within 31 July and they will miss the ITR deadline.

According to a report in The Times of India on Friday, the tax department has received several complaints and letters from taxpayers who have expressed their inability to link the two identifications. It’s unfair to push the citizens to meet a stringent deadline when the government itself has not put simple systems in place.

In fact, as per government data only 25 percent of PAN cardholders have completed the process as of 17 July. This number must have surely gone up in the last 10 days, considering the fact that many have rushed to do it before the deadline.

Problems while applying for Aadhaar

Those without an Aadhaar or its application number are in a spot, as taxpayers with an income of above Rs 5 lakh have to mandatorily file their I-T Returns online. Since you are permitted to give an application number of Aadhaar, if you don’t have a card yet, on the ITR form, many are rushing to Aadhaar centers.

There have been reports of maddening rush at these centers across the country. People are standing for hours in queue, in what almost resembles the hour-long queues at banks post the demonetisation of Rs 500 and Rs 1,000 notes in November last year. Take, for instance, the rush at Akshaya centres in Kochi, as per this ToI report. Here people stood in line from 5:30 a.m. and yet did not get Aadhaar registered due to poor GPS signal.

In fact, some Aadhaar agents are taking undue advantage of citizens who are desperate to get the number. A report in the Nav Bharat Times said such agents are illegally charging hundreds of rupees under the pretex of the service charge. In case it is a correction or updation, the charges, it seems, are even higher. Desperate citizens, who are worried about meeting the ITR deadline, end up paying these illegal charges. Many senior citizens are unable to get to Aadhaar centers, and many have complained to the I-T department about this.

However, most of these problems are for the poor. There are cases where some of the agents even took the machines to homes of the rich, who were not willing to come to the centres. A report in the Asian Age said most of the centres in Mumbai have no machines, as they have been taken by authorities to install GPRS. The move is aimed at stopping this practice to helping out the rich. The report said the some of the centres in the city have remained shut for the last 10 days for updates. This when just two more days are left for ITR filing.

Worse still, there was an instance where pranksters managed to get details of the ATM card of an Air India manager, under the pretext of Aadhaar linking (read here).

However, the truth is there is technically no deadline as such to link Aadhaar and PAN. But if you want to file returns you are expected to be compliant by 31 July.

As is evident from the cases mentioned, the citizens clearly needs more to conform to the new norm. There is enough reasons for the government to extend the ITR filing deadline and also give a comfortable deadline for linking Aadhaar and PAN.

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Updated Date: Jul 31, 2017 11:50:26 IST

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