The Central Board of Direct Taxes (CBDT) has extended the deadline for taxpayers engaged in international transactions, allowing them an additional 15 days to file their income tax returns (ITR) for the financial year 2023-24.
This extension applies to those required to submit reports under Section 92E, specifically taxpayers undergoing Transfer Pricing (TP) audits. The new deadline for these taxpayers is now December 15, 2024, as opposed to the original November 30, 2024, deadline.
The change, formalised through Circular No. 18/2024 dated November 30, 2024, comes as a relief to those taxpayers involved in TP audits.
According to Rajarshi Dasgupta, Executive Director of Tax at AQUILAW, the extension provides much-needed breathing room for those struggling to comply with the complex process of filing their returns.
By meeting the extended deadline, taxpayers can avoid incurring penalties for late filing and can also carry forward any losses they may have incurred during the year.
The extension specifically targets taxpayers who have entered into international transactions or specified domestic transactions with related parties. These entities are required to file a Transfer Pricing report in Form 3CEB, which must be certified by a Chartered Accountant.
As per the CBDT’s announcement, the deadline for submitting the ITR for these taxpayers has been pushed from November 30 to December 15. However, it's crucial to note that the deadline for submitting Form 3CEB remains October 31, 2024, and this part of the process has not been extended.
Ankit Jain, partner at Ved Jain & Associates, clarifies that taxpayers who are part of international transactions with related parties must submit a detailed report under Section 92E.
This requirement is typically applicable to businesses or individuals engaged in cross-border transactions.
The mandatory submission of Form 3CEB is to ensure compliance with transfer pricing regulations, which aim to prevent profit shifting and ensure that related parties charge arms-length prices for goods, services, and other transactions between them.
Failure to file the required report under Section 92E can result in penalties. Kunal Savani, partner at Cyril Amarchand Mangaldas, highlights that a penalty of ₹100,000 can be levied on taxpayers who fail to furnish the necessary report.
This underscores the importance of meeting the filing requirements and adhering to the regulations set out by the Income Tax Department.
For many taxpayers, the additional time to file their returns could help in navigating challenges associated with international transactions.
The extension ensures that businesses and individuals involved in global trade have enough time to comply with these important tax obligations without the added pressure of immediate deadlines.
However, despite the extension, taxpayers should remain mindful of the need to meet the original deadline for submitting Form 3CEB to avoid penalties.
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