The due date to file the income tax return (ITR) for assessment year (AY) 2019-20 got over on 31 August. Though the due date to file ITR was extended by a month from 31 July to 31 August, about 5 million people filed their returns on the very last day, according to data on the income-tax website. Filing your returns at the last moment or in the hurry to meet the deadline can easily result in mistakes. The chances of making mistakes are particularly high this year, given that there were many changes in the ITR forms and taxpayers were required to furnish additional details; even the format of Form 16 changed. Though some ITR forms came pre-filled, taxpayers were required to verify this pre-filled data before filing the returns.
“There have been substantial changes in ITR forms for AY20 which may have resulted in certain common errors by individuals," said Tapati Ghose, partner, Deloitte India, a tax and audit firm.
Remember that making a mistake while filing the ITR may nullify your returns. But the good news is that you get an opportunity to go through the returns you have already filed and also make corrections if you discover any mistakes or omissions by filing a revised return. If you do not revise your returns on your own, the income tax department may send you a notice to do so. However, any refund you may be eligible for will remain blocked until you file the revised and correct returns.
You can check the returns you have filed by logging into your profile on the income tax portal.
Things to check
The common mistakes people make is omission or wrong reporting of income or deductions, non-disclosure of assets and liabilities, non-disclosure of foreign income and assets, filing return in the wrong ITR form and so on.
The first thing to check is whether you have used the correct ITR form. Next, check whether or not you have declared all income. Remember that income is not just the salary you receive or the profits you make from your business, but also includes interest income from your savings bank and fixed deposit accounts, and profit from investments made in the name of family members, as per the clubbing provisions. Besides, you also need to declare exempt income and ensure that the details of tax deducted at source match with details in Form 26AS, added Ghose. Form 26AS is an annual consolidated credit statement, and contains details of various taxes deducted on your income by your employer, bank, or even a tenant.
Other mistakes include “not claiming a particular deduction and not reporting a loss. Tax filers should check these details too," said Archit Gupta, founder and chief executive officer, ClearTax, a tax filing and investing portal. Also, check bank account details like bank account number or IFSC code, especially if you have claimed refund of taxes.
Mistakes might occur as a result of limited knowledge or due to lack of accurate information available at the time of filing. In case you find you have made a mistake, you should file a revised return as early as possible under Section 139(5) of the Income-tax Act, 1961.
The window to file a revised ITR remains open till the end of the relevant AY or before the assessment of return by the tax department, whichever is earlier. In other words, returns filed for AY20 can be revised till 31 March 2020, or before the assessment happens, whichever is earlier. “Alternatively, if the income tax department has already processed the tax return then a rectification under Section 154 can be filed for rectifying arithmetical mistake, clerical error and so on," said Ghose.
There is no penalty for filing a revised return. “If the taxpayer has originally filed the return within the time limit i.e. before 31 August 2019, then the same can be revised multiple times on or before 31 March 2020 without any penal consequences," said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP, a chartered accountancy firm.
However, disclosing additional income may attract tax and interest on this tax. “There are no interest implications in case of change in disclosure requirements only. However, if there is any additional income resulting in additional taxes payable, interest at the rate of 1% per month is payable till the payment of the tax," said Ghose.
How to file
The filing process for revised returns is the same as that for filing an original return. The only difference here is that you need to choose the option “revised return" from the drop down list. The revised return also needs to include the changes proposed to be made and the details of the earlier return filed such as the date of filing the earlier return and the acknowledgement number.
There is no restriction on the number of times a return can be revised, provided it fulfils the stipulated criterion. However, one has to file the revised return in the same mode in which the original return was filed. That means if the original return was filed electronically, the revised return too has to be filed electronically. Similarly, if the original return was filed physically, the revised return should also be filed physically. Once a revised ITR is filed, the original or the previous return is deemed to be withdrawn.
Many people avoid or are reluctant to file a revised return, believing that doing so may attract the taxman’s attention, but experts say there’s no need to worry if there are minor changes such as rectification of personal details or updating of bank details. However, significant changes in income declared, or deductions or expenses claimed in the earlier return may give rise to suspicion against you.