Indian currency notes
A stack of the old Rs 500 notes is seen in the image above [Representational Image].Reuters

The central government may extend the deadline for disclosing black money and filing income tax returns for the one-time compliance window. It has accepted the request of companies to submit tax in instalments. 

Trade bodies have sought soft approach in payment of taxes. The companies have asked for extension of the scheme to address the cash flow problem during the month of November. 

"The government is favorably considering to extend the tax payment deadline as it understands the liquidity crunch around November," an official was quoted as saying by the Press Trust of India. The discussion is currently on with companies with regard to the duration of extending the payment window. 

The discussion follows Finance Minister Arun Jaitley's meeting with chartered accountants, industry associations and tax professionals last month in a bid to understand their concerns around the compliance window.

The window for the Income Declaration Scheme (IDS) 2016 opened on June 1 and will close on Sept. 30. The tax and penalty declaration, as per the original scheme was to be paid by November.

During the union budget in February 2016, Arun Jaitley had announced a four-month compliance window period to declare unaccounted wealth, pay a tax penalty of 45 percent and avoid persecution, PTI added.

Last month, Prime Minister Narendra Modi had warned that those holding black money must declare their unaccounted wealth by Sept. 30, he also added that no reprieve would be provided for defaulters once the deadline ends.

"Let me tell the countrymen that this chance is still September 30. Consider this as the last chance. It will be better that you take advantage of the window provided and save yourself from the difficulties that you can face after September 30," Modi had said during his monthly radio programme "Mann Ki Baat."