Friday, August 3, 2012
India's Central Board of Direct Taxes (CBDT) has temporarily relaxed its e-filing requirements after problems emerged with its own software and a nationwide power failure left over 600m people without electricity.
Tax returns must be filed electronically for income tax years subsequent to and including 2012-13 where an individual or Hindu undivided family's total income or total assessable income during the previous year exceeds INR1m (USD18,000).
However, the CBDT says that it has been brought to its attention that the agents of non-residents are experiencing difficulties with e-filing. A non-resident may employ more than one agent for different transactions, and a person in India may act as an agent of more than one non-resident. Existing e-filing software does not cover such situations, as it functions on the principle of one assessee, one permanent account number (PAN), one return.
Private discretionary trusts are also facing problems, the CBDT admits. Those with a total income exceeding INR1m are struggling with e-filing in cases where they are filing their return in the status of an individual. In Indian law, private discretionary trusts have the status of an "individual". Unfortunately, the e-filing software does not accept the return of a private discretionary trust under this status.
The Board has now decided that it will no longer be mandatory for agents of non-residents with total income exceeding INR1m to complete e-returns for the 2012-13 assessment year. Similarly, the e-filing requirement for those private discretionary trusts affected has also been dropped.
The government has also been forced to push back the deadline for the e-filing of millions of individual tax returns after a massive power failure cut off supplies for nearly two days. The deadline for 2012-13 will now be August 31, 2012, a month later than originally planned.