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Made A Mistake in Tax Filing? Here Is What You Can Do

E-filing of income tax can save lots of time if you are aware of the various income tax guidelines. In this article, we bring to you the common mistakes that people tend to make while submitting their returns. We also know that to err is human. So, we will also tell you how you can correct the mistakes if you end up making one.

Some of the commonly made errors during e-filing of income tax are:

  • Wrong selection of ITR Form
  • Once you log in to the Income Tax Department’s website, you will be able to see multiple ITR Forms. For instance,
  • ITR 1 is meant for individuals whose annual earnings are less than INR 50 lakhs. Source of income could be salary, pension, rental or house related income and other sources.
  • ITR 2 is to be used when the income exceeds INR 50 lakhs and/or if there are capital gains or foreign income. Also, if someone has a partnership firm or agricultural income above a certain limit, this form is to be used.
  • Individuals following the presumptive method of taxation need to be go with ITR 4.

It is important to read the guidelines for each ITR Form in detail before starting with the e-filing of income tax.

  • Mistakes in personal details 
  • Spelling errors in name, incorrect bank account details, old address or contact details constitute a major chunk of the errors made while filing returns. In many of these cases, the Income Tax Department has to reject such forms due to either mismatch of data as per their database or inability to reach out to the taxpayer (via email or phone).

 

  • Wrong classification of deductions
  • Many a times people do not invest their time in understanding the tax deduction clauses in detail. For instance, individuals sometime club the principal amount repaid for home loans as well as the interest under Section 80C. However, the correct way is to put the interest under Section 24. Also, many people include the employer’s contribution towards Provident Fund under Section 80C. This is incorrect. Claiming deduction under wrong sections can lead to rejection of the form by the Income Tax Department.

 

  • Not disclosing all income sources
  • It is important to ensure that all our earnings are captured while doing the e-filing of income tax returns. Some common income sources that people tend to forget are:
  • Interest from various term deposits such as Fixed Deposits, Recurring Deposits, bonds, etc.
  • Income from savings account
  • Income from sources other than salary such as rental earnings
  • Income from a previous organization or employer in that particular financial year
  • Income of a minor child that needs to be clubbed

 

  • Failure to include all bank accounts
  • The Income Tax Department has made it mandatory to include all bank accounts held by an individual in the tax returns. Only dormant accounts are not included in this requirement. This has been done to prevent money laundering.
  • Many times, people only include their primary bank account while doing e-filing of income tax. They might feel that the other accounts are hardly used or have very low balance in them. However, this step might be perceived by the Income Tax Department as a way of tax evasion and incorrect disclosure of facts.

 

  • Foreign Assets and income
  • It is essential to report all foreign assets and accounts (even if not operational) held by an individual. Additionally, all accounts wherein the individual is the signing authority, need to be disclosed.

 

  • Incorrect year of return
  • Though it sounds very simple, but many people make an error in selecting the correct year of return. The terms such as “financial year” and “assessment year” can be sometimes confusing. One should remember that financial year refers to the year in which the income was earned and the assessment year refers to the year in which the e-filing of income tax is being done.

How to submit a request for rectification?

One needs to follow the below steps:

  • Visit the e-filing income tax website (incometaxindiaefiling.gov.in/) and click on “Registered User”. Login with the below mentioned details.
  • User ID (This is usually the PAN details)
  • Password
  • Date of Birth or incorporation
  • Captcha code as displayed on the screen
  • Go to the section “E-File”
  • Click on the “Rectification” option
  • Enter the below mentioned details
  • PAN details
  • Assessment Year for which the return needs to be revised
  • Communication Reference Number in the CPC order
  • Click on the “Validate” option
  • Once the request has been successfully validated, the individual is required to select the type of rectification request. Some of the options provided to the taxpayer are:
  • Correction in data is being done due to a Tax Credit Mismatch only
  • Correction in data due to rectification
  • No further Data Correction required. Reprocess the case.

Tax Credit Mismatch

  • If one has selected the tax credit mismatch option, he or she can fill up the required applicable schedules such as TDS on Salary, TCS Details or TDS other than salary.
  • Click on “Submit” option once all details have been correctly uploaded.

Rectification 

  • If one has selected revision due to rectification, he or she needs to select the reason behind the same. Some options of rectification reasons include
  • Income chargeable under the Head “Business and Profession” has been wrongly considered
  • Income chargeable under the Head “Capital Gains” has been wrongly considered
  • Income chargeable under the Head “House Property” has been wrongly considered
  • Current Year losses were not set off correctly
  • Request for change of residential status
  • Mismatch in salary income
  • Mismatch in tax payments as per the CPC Order
  • Request for claim of deduction as per Section 80P
  • Date of filing of the Original Return has been marked as “Not within due date”
  • One can select at max four reasons.
  • Once the rectification reason(s) has been selected, the taxpayer is directed to a new page which displays the details
    • Reason you selected
    • Schedules being changed
    • Select and upload the rectification XML file
    • Select the type of Digital certificate (If Applicable)
  • Once all the details have been uploaded, click on Submit
  • Post successful upload, a message stating the same is displayed on the screen.

No Data Change required

  • If the taxpayer selects this option, the below mentioned options are displayed in case the data in the ITR Form is correct but mismatch in TDS has been rectified:
  • Tax Credit Mismatch
  • Mismatch in gender
  • Tax or Interest Computation
  • The taxpayer can select the applicable option and click on submit.

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Written by Shiv Shekar

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