Year-round tax return filing in the offing

The government is considering allowing individual taxpayers to submit income tax returns throughout the year, replacing the existing system of fixed deadlines that are routinely extended.
A new provision is likely to be included in the National Budget for FY 2026-27 to make the process more flexible and encourage timely compliance through incentives rather than repeated extensions.
Speaking to The Financial Express, National Board of Revenue (NBR) Chairman Abdur Rahman Khan said the return submission process would be made more taxpayer-friendly by removing stringent time-bound conditions for all.
Instead, the NBR plans to introduce incentives for those who file their returns early, he said.
According to the proposal, there would be four tiers for individual tax return submissions.

Under the first tier, taxpayers filing within the first quarter of the fiscal year would receive incentives as early filers.
Returns submitted in the second quarter would be treated as regular filings, carrying neither incentives nor penalties.
Those filing in the third quarter would have to pay a nominal penalty, while returns submitted in the final quarter would incur a slightly higher penalty.
However, the four-tier provisions would not apply to taxpayers who fail to file returns within the tax year.
"If the plan is approved by parliament, the cumbersome process of repeatedly extending deadlines for tax return submission will no longer be necessary," the NBR chairman said.
Jahangir Alam, a noted tax consultant, however, considers the existing system adequate and cautioned that the proposed four-tier structure might delay submissions.
"If the provision changes, large individual taxpayers may find it beneficial to delay filing in order to keep their tax money in banks and earn interest," said Mr Alam, who is also executive director of Golden Bangladesh.
He noted that under the current system, taxpayers can apply to tax offices for deadline extensions if needed.
In a special order issued the same day, the NBR said that under sub-section (4) of Section 328 of the Income Tax Act, 2023, online filing is mandatory for all individual taxpayers except certain categories.
Taxpayers must submit e-returns through the designated website.
However, those unable to file online due to technical difficulties or registration issues may apply to the concerned Excise Commissioner by March 15, 2026, stating the reasons.
If the application is accepted, permission to submit a paper return may be granted with the approval of the Additional or Joint Tax Commissioner.
Under existing provisions, taxpayers who miss the deadline must pay 2.0 per cent monthly interest on the payable tax.
As in previous years, the NBR extended the tax return submission deadline four consecutive times this year following requests from tax lawyers and various groups.
The latest deadline for individual taxpayers is March 31, 2026.
Until February 28, 2026, around 3.9 million taxpayers had submitted returns online, while nearly 0.3 million filed offline, according to NBR data. In total, only 33.6 per cent of the country's 12.5 million Taxpayer Identification Number (TIN) holders have filed returns.
The NBR chairman said offline returns are being digitised promptly to ensure that all data are maintained on a unified digital platform. Under the Income Tax Act, individual taxpayers are required to submit returns by November 30 each year.
However, the NBR has not been able to adhere to the deadline in any recent tax year due to low submission rates within the stipulated timeframe. Decisions to extend the filing deadline are taken in the public interest under Section 334 of the Income Tax Act, 2023, with prior government approval.
Typically, taxpayers rush to tax offices in the final week before the deadline. From this year, however, most taxpayers no longer need to visit tax offices, as online submission has been made mandatory for individual filers.
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