Any refund you are eligible for won’t be processed unless you correct the mistakes in your return
After filing your income-tax return (ITR), you may discover that you have committed a few mistakes. The Income-Tax (I-T) Act, 1961, allows you to revise the return you have filed. The deadline for filing a revised return for Assessment Year 2022–2023 (FY22) is December 31, 2022.
According to Himesh Thakur, senior associate, PSL Advocates & Solicitors, “The purpose behind filing a revised return is to allow the taxpayer to rectify the errors that may have been committed previously.”
Disclose higher or lower income
In a revised return, the taxpayer can disclose any additional income missed in the original return. He may also claim additional deduction on a tax-saving investment, claim the benefit of donations not included previously, or claim additional tax credit. Mistakes in filling personal details can also be corrected.
Either higher or lower income can be reported. Ankit Jain, partner, Ved Jain & Associates, says, “The law doesn’t stop a person from filing a revised return to declare higher or lower taxable income than the income reported in the original return. If higher income is declared, the taxpayer will have to pay the additional tax on such income, along with interest. No penalty is levied.”
Who can file
Any assessee required to file a tax return is entitled to file a revised return under Section 139(5) of the I-T Act.
A revised return can’t, however, be filed under certain circumstances. Sumit Mangal, partner, Luthra and Luthra Law Offices India, says, “A taxpayer can revise his tax return provided the original ITR was filed before the due date of filing the tax return. A person who filed his return after the deadline is not eligible to revise it.”
Maneet Pal Singh, Partner, I.
P. Pasricha & Co adds, “If the assessing officer has completed the assessment of your ITR under Section 143-(3) of the I-T Act, 1961, a revised return can’t be filed.”
By when can you revise?
A revised return can’t be filed after the above-mentioned deadline. An option to file an updated return exists after the deadline for filing a revised return has passed. Jain says, “However, only an upward revision of income is allowed in such a case. There’s no option then to reduce the income.”
If the taxpayer was unable to file the revised return on time due to a genuine hardship, he can file an application requesting that the delay be condoned.
Errors have consequences
Filing a revised return doesn’t have any consequences if you make minor changes, such as changing your bank account information, personal details, and the like. Aditya Chopra, managing partner, Victoriam Legalis — Advocates & Solicitors, says, “However, in case of undeclared income or other important rectification done in the revised return, the tax department might pick up the change and the tax filed in the earlier return may be taken up for scrutiny.”
At the same time, if there are mistakes in your original tax return and you don’t file a revised return, the I-T Department could issue you a notice. Chopra says, “If there are mistakes in your original return, any refund you are eligible for, will not be allowed until a revised return is filed.”
No cap on revisions
There is no limit on the number of times you can revise your return. Chopra says, “But avoid misusing this facility and take utmost care while filing the original return.”
Provide the details of your original ITR each time you file a revised return.
No penalty is levied on filing a revised return. So, if you have made a mistake, don’t be afraid to correct it by filing a revised return.
Things to keep in mind
A revised ITR replaces the original one. Once a revised return is filed, that will be considered your final return.
A revised return must also be verified. Singh says, “Remember that from August 1, 2022, the I-T Department has reduced the time limit to verify the ITR from 120 days to 30 days.”
And there’s also option to file updated return
- The Finance Act, 2022 introduced a new return filing facility called updated return
- This, too, allows taxpayers to correct errors and omissions in a previous ITR
- They may also file a new ITR if they did not do so previously
- A taxpayer can revise his return for up to two years from the end of relevant assessment year using this facility; updated return for FY 2021-22 can be filed by March 31, 2025
- A penalty must be paid: 25 per cent if filed within 12 months and 50 per cent if filed within 24 months from end of relevant assessment year
- This provision can’t be utilised if the updated return results in a loss, or has the effect of decreasing the tax liability