ITR filing deadline extension: Govt says penalty imposed on managed service provider in FY26

In a written reply to a query in the Lok Sabha on July 20, 2026, the Union Minister of State for Finance Pankaj Chaudhary said, "MSP is liable for penalty if the due date of ITR filing or any other pre-notified date gets extended on account of any reasons attributable to the MSP. Penalty on this count has been imposed upon the MSP in F.Y. 2025-26."

The minister made the above statement in response to the following queries by MP Shyamkumar Daulat Barve:

• Whether the Government is aware of the persistent technical glitches, data processing errors and systemic login failures on the e-filing Income Tax Portal, causing widespread disruptions for taxpayers, if so, the details thereof;

• The specific technical or structural remediations steps taken by the Government to resolve these infrastructure deficits;

• The details of contractual accountability measures or financial penalties, if any, initiated against the managed service provider (Infosys) for prolonged non-functioning and operational lapses?

Chaudhary also shared details of other penalties imposed on the MSP:

1)As per the original schedule, MSP was required to deploy IEC 2.0 project [e-Filing portal is part of IEC 2.0 project i.e. ‘Integrated e-Filing and Centralized Processing Centre 2.0’project], for use of taxpayers, in July 2020 but the MSP could not deliver the project in time. Hence, a penalty in the form of ‘liquidated damages’, was imposed upon the MSP.

2)The performance of MSP of IEC 2.0 is mainly ascertained through Service Levels Score, including prolonged non-functioning and operational lapses. Service Levels Score are measured on quarterly basis, and penalties for 12 quarters for the lower performance score have been imposed upon the MSP.

3)As per relevant provisions of the contract, the MSP has to make all efforts to maintain application performance levels of the e-Filing portal and avoid application outage, especially during peak filing period. Penalty for application outage during peak period in e-filing services has been imposed upon the MSP in F.Y. 2025-26.

Is the e-filing portal ready for AY 2026-27?

The MoS Finance said the e-filing portal is a high-volume digital platform, servicing crores of Indian taxpayers, generally with usage rising sharply in the days preceding statutory due dates.

"Given the high scale of concurrent access in the peak filing period, some taxpayers may, at times, experience transient technical issues such as slower page response or intermittent delays during periods of peak concurrent load," said Chaudhary.

"However, despite the substantial increase in load, e-Filing portal has been functioning in a largely stable and efficient manner during the ongoing peak filing period, with performance being monitored on a continuous basis through a dedicated Daily/Hourly Monitoring Dashboard tracking login, Income Tax Returns (ITRs) filed, Annual Information Statement (AIS)/Compliance Portal redirections, payment gateway status, error codes and other operational indicators. Any technical issue reported is taken up for time-bound identification, escalation and resolution," he added.

2025 vs 2026: Activities on e-filing portal between 8-14 July