Infosys Faces Penalties Over Income Tax Portal Issues and Deadline Extensions

The Indian government has confirmed that Infosys, the managed service provider responsible for the Income Tax Department's e-filing portal, incurred financial penalties during the fiscal year 2025-26 due to technical difficulties on the platform. These issues led to the extension of the income tax return (ITR) filing deadline, as revealed by Union Minister of State for Finance Pankaj Chaudhary in a written response to a question posed in the Lok Sabha on July 20, 2026. The minister explained that the penalties were imposed because the service provider's shortcomings necessitated the government to prolong statutory deadlines. Chaudhary stated, “The 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 FY 2025-26.” This situation underscores the accountability of service providers in managing critical government infrastructure effectively.

In addition to the penalties related to the ITR filing deadline extension, the government disclosed that Infosys faced several other actions due to delays and service-related deficiencies under its contractual obligations. A significant example cited was the postponed launch of the Integrated e-Filing and Centralised Processing Centre (IEC) 2.0 project, which was originally scheduled for July 2020. The government imposed