Possibly due to the complicated tax rules, many people seek help from chartered accountants and tax-filing websites to file their Income Tax Return (ITR). Therefore, July is a busy month for those participating in this annual exercise. The ITR filing deadline ends on July 31 every year.

Whether it is capital gain from mutual funds, shares, or house property, the tax rules governing them or understanding of Form 16, if received from more than one organisation, can be quite complicated for some taxpayers. Data from the Income Tax Department (I-T) shows that some four crore taxpayers filed ITRs by July 22, 2024, a feat achieved two days earlier than last year for the same number of people.

Those who miss the deadline can file their ITRs by December 31 after paying a penalty.

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Income Tax Rules

The Income Tax Act contains 298 sections, 23 chapters, and several other provisions, and understanding all of them for a layman may not be possible. According to the chairman of the Central Board of Direct Taxes (CBDT), Ravi Agrawal, whom PTI has quoted in a news report, “The taxpayers feel the Act is not simple as it ought to be; it is cumbersome, so if we can make this Act simpler to comprehend in terms of language, presentation, then that hitch of the taxpayer to not see the Act and take the help of a tax practitioner or someone (maybe eased)…”

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Complex Tax Language

So, possibly due to the complex language of the law, many people postpone ITR until the last moment or hire an expert to file it for them, and that is why there is a rush on the last date.

In her 2024 Budget speech, Union Finance Minister Nirmala Sitharaman announced a comprehensive review of the Income-tax Act, 1961, to “make the Act concise, lucid, and easy to read and understand” and reduce disputes and litigation, and provide tax certainty to taxpayers.

ALSO READ: ITR Filing 2024: What Deductions Does Section 80TTB Provide For Senior Citizens?

Comprehensive Review of I-T Act

This exercise is expected to be completed within six months and may have already started with the changes in the tax rates for capital gain, tax deducted at source (TDS), etc., announced in the Budget. The I-T Department has also sought to simplify the ITR filing process for taxpayers online, although there is still ample room for further simplification.