The Centre has confirmed that the Managed Service Provider (MSP) for the Income Tax Department’s e‑filing portal has faced multiple contractual penalties over delays, application outages and poor service performance. Despite these issues, the portal has been functioning in a largely stable and efficient manner during the peak income tax return (ITR) filing season.
In a written reply on July 20, Minister of State for Finance Pankaj Chaudhary answered a Lok Sabha question about technical glitches, data processing errors and login failures on the e‑filing portal. He described the portal as a high‑volume digital platform, servicing crores of Indian taxpayers, with usage rising significantly as statutory deadlines approach.
Data from July 8‑14, 2026 shows substantially higher activity than the corresponding period in 2025. Chaudhary noted that some taxpayers may, at times, experience transient technical issues such as slower page response or intermittent delays during periods of peak concurrent load.
However, he added that the e‑Filing portal has been functioning in a largely stable and efficient manner during the ongoing peak filing period. Performance is monitored continuously through a dedicated daily and hourly dashboard tracking logins, ITR filings, Annual Information Statement (AIS), payment gateway status, error codes and other operational indicators.
The government has undertaken several technical and structural measures ahead of the peak filing period. The e‑Filing ecosystem has been comprehensively strengthened and performance‑tested to support peak filing volumes, with validated capacity to handle up to 1 crore ITRs per day, ensuring sufficient headroom beyond the projected peak demand.
The MSP is contractually liable if the due date for filing income tax returns or any other pre‑notified deadline has to be extended for reasons attributable to the service provider. Penalties on this count were also imposed during FY 2025‑26.
According to Chaudhary, the government imposed contractual penalties on the MSP for multiple lapses related to the e‑filing portal. The MSP could not deliver the IEC 2.0 project on time, resulting in liquidated damages. Service Levels Score, measured quarterly, led to penalties for lower performance over 12 quarters.
Additional penalties were levied for an application outage during the peak period in FY 2025‑26 and for any extension of ITR filing dates caused by the MSP’s shortcomings.