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Comprehensive understanding of rectification of ITR - Meaning, process, time limit
What if you found some material corrections are needed after filing ITR?? In case you want to make some changes in the return then rectification of return u/s 154(1) is one of the ways out. Rectification is normally done after receiving intimation u/s 143(1) for mistakes which you can apparently notice from the available documents. But, if there is error or omission then revision of ITR is required and not rectification.
Lets understand the procedure and various aspects related with rectification in detail.
As mentioned above, only on some specific grounds rectification is requested. These grounds are normally termed as “mistake apparent from records”. If we interpret the phrase in a layman language we can develop an understanding that those mistakes can be rectified which are traceable from documentary records. These records are normally the supporting based on which we filed our ITR such as form 16, form 26AS, income statements, deduction proofs, notifications or pronouncements made by IT department etc. Till date law has not prescribed any list. But professionals could conclude some pointers such as:
The key lies in the fact that rectification cannot be made freely for any mistake. Also, there is a specified process through which rectification can be resorted to. The following orders can be rectified on request or on the discretion of income tax officer as per section 154
“Return processed at CPC can only be Rectified. Even if it is a belated return.”
Rectification u/s 154 can be done for any matter which is not considered and decided in appeal/ revision. Further, any matter which has already been considered and decided in any proceedings by way of appeal or revision, the rectification of such matter is not possible under section 154.
Example : Suppose, the A.O.(Assessing officer) has made the following adjustments to the returned income of PQR Ltd.
i) Certain expenses of Rs. 1,00,000 were disallowed
ii) Addition u/s 43B made for Rs 1,25,000 as proof of payment was not furnished
Now, following are the current position of assessee i.e. PQR Ltd.
On submitting the rectification application the Assessing Officer rejected the same, giving reasoning that this particular case has already been decided by appellate authority hence, no rectification request can be admitted in such a scenario.
The power to seek rectification is mutual. Which means, it can also be exercised by an IT officer if he finds the necessity of corrections in his decision made. You can easily raise an online request for rectification by following the simple series of steps as mentioned below :
A. Login to www.incometaxindiaefiling.gov.in
B. From the drop down “Efile” select “Rectification”
C. Mention the credentials asked like
Order or intimation to be rectified - Select between Income Tax or Wealth Tax from the drop down menu
D. Select the rectification request type
There are four types of request from which you can choose
By selecting this option you can make multiple corrections (Maximum of 10 sub categories at a time) in Income Tax amount, TDS (Tax Deduction at source) amount and TCS (Tax Collection at source) amount you specified in Income Tax Return.
Choose reasons(max. 4 can be selected and schedules for which you are requesting rectification.You need to upload xml for the changes desired.
Through choosing this option you can request to reconsider the areas of Tax credit mismatch or 26AS details. No xml to be uploaded in this case.
Need to fill here the details as asked in the columns
E. Click on submit below the screen. Next select OK on pop up asking for confirmation that your TDS entries are in sync with 26AS
F. A reference number is generated followed by successful submission of request.
Generation of reference number ensures successful submission of your rectification request with the IT Authorities. Order under section 154 will be received by you after the request is processed successfully.
In nutshell, the Rectification of income tax return gives you and the income tax officer the same right to make corrections in return. You cannot seek corrections after 4 years from the end of the financial year (from passing of order sought to be rectified).
For filing a valid Rectification Request u/s 154 following pointers should be adhered to
Assessee can file rectification within 4 years from the end of the financial year in which order sought to be amended was passed. Order sought to be amended does not necessarily mean the original order. It could be any order including the amended or rectified order
Taxpayer can file his Revise Return within the time limit to rectify the error in return.
Taxpayer can withdraw the rectification request within the end of the day of request.
It can be done by making a login into the income tax site and selecting the income tax credit mismatch under ‘Rectification’ in ‘e-file’ tab and then filling in the required details as explained above.
No, this cannot be done now as filing revised return for previous years is not permitted under the law.
Yes, an appeal can be filed against rectification order.
Either pay the excess refund amount at the time of filing revised return and enter the challan details while filing revised return. Alternatively, after processing of revised return, there will be an outstanding demand for the amount of excess refund in Intimation u/s 143(1) for the revised return and you need to pay the same later on receipt of Intimation.
If you have received less refund, then while processing the return,the income tax department may have some outstanding demand which is intimated through intimation under 143(1). To review this login to your income tax portal> My Account>Tax credit mismatch. If you agree, then select agree and if not you have to provide reasons for the same.
Communication reference no. auto-populates after selection of the year for which rectification is to be filed. Also, it can be traced from the order/ intimation received for which rectification is to be filed
Tax Demand can be paid via Challan 280. This challan can be filled online from TIN-NSDL website and demand can be paid via online banking / debit card etc.
Rectification can be made upto 4 years from the end of the financial year in which order sought to be rectified was passed. Suppose the order for which you want to submit rectification request was issued in the Financial Year 2015-16 then you can submit rectification request u/s154 till 4 years i.e. till 31st March 2020.
Sometimes there may be a mistake in any order passed by the Assessing Officer. In such a situation, mistakes which are apparent from the record can be rectified under section 154.
Rectification can be filed online after making a login on your income tax India e-filing account. For the step by step process please refer above.
Revised return can be filed before completion of assessment or before the end of the respective assessment year whichever is earlier. However, rectification can be filed after processing of return or after receiving intimation u/s 143(1).In case of filing rectification against order then it can be filed upto 4 years from the end of the financial year in which order sought to be amended was passed.
Yes, appeal can be filed against the intimation u/s 143 (1) before the CIT(A).
There is no requirement to quote the communication reference number for submitting rectification request u/s 154 online as per the new changes as the latest communication reference number auto-populates.
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