Errors in your Income Tax Return (ITR) can be fixed using one of three methods provided by the Indian tax system. The right choice depends on when you discover the mistake and the type of error you need to correct. Here’s a breakdown of the three options:
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This is the most common way to fix errors you discover yourself after filing your original ITR. It is a complete replacement of your initial return.
- When to use it: Use this when you’ve made a mistake in your original filing, such as under-reporting income, failing to claim a deduction, or making a clerical error. It is for correcting your own genuine errors.
- Deadline: You can file a revised return for a given assessment year (e.g., AY 2025-26) until December 31 of that same year, or before the completion of your assessment by the Income Tax Department, whichever is earlier.
- How it works: You must log in to the e-filing portal, select to file a revised return, and quote the acknowledgment number of your original return. The new, corrected return will supersede the old one.
2. Rectification Request (Section 154)
A rectification request is for correcting “mistakes apparent from the record” after your return has been processed by the tax department and they have issued an intimation (under Section 143(1)).
- When to use it: This is typically for straightforward errors or mismatches that the department has identified, such as a calculation error, a mismatch in TDS credit, or a clerical issue. You cannot use this to add new income or claim new deductions.
- Deadline: A rectification request can be submitted within four years from the end of the financial year in which the order to be rectified was passed.
- How it works: You can file the request online through the e-filing portal via the ‘Services’ tab, specifying the relevant assessment year and the reason for the request.
3. Updated Return (Section 139(8A))
This is a new provision that acts as a safety net for taxpayers who have missed the deadlines for filing a revised or belated return and have unreported income.
- When to use it: This option is for voluntary disclosure of income you missed reporting earlier. It allows you to correct omissions long after the regular filing deadlines have passed.
- Deadline: An updated return can be filed within 24 months from the end of the relevant assessment year. As per recent budget announcements, this timeline may be extended to 48 months in the future.
- Key Conditions:
- It can only be used to report additional income, not to reduce your tax liability or claim a refund.
- You are required to pay an additional tax, which is a percentage of the total tax and interest on the missed income. The penalty is 25% if filed within 12 months from the end of the assessment year and 50% if filed after 12 months but within 24 months.
- It cannot be filed if a search or survey has been initiated by the tax department against you.
