Tag: ITR STATUS

What to Do If You Make a Mistake in Your Income Tax Return (ITR)

The process of filing an Income Tax Return (ITR) and what to do if a mistake is made in the filing.

Filing an Income Tax Return (ITR): Ensuring Accuracy and Correcting Mistakes

Filing an Income Tax Return (ITR) is a crucial responsibility for every taxpayer. It is important to calculate your income and deductions accurately to avoid any complications in the process. However, errors or omissions can sometimes occur, even with the utmost care. In such situations, it is essential to be aware of the proper course of action to rectify the mistake.

Mistake in ITR: Before Verifying

If you realize that you have made a mistake in your ITR after submitting it but before verifying it, you cannot simply file a new ITR without verifying the first one. The income tax portal will not allow you to do so, as per the rules. Even if you manage to upload a corrected ITR without verifying the original one, you are likely to receive a notice from the tax department. Therefore, the first step in correcting your mistake is to verify the ITR you have already filed.

Mistake in ITR: After Verifying

Once you have verified your ITR and discovered an error or omission, you can file a revised ITR to correct the mistake. It is important to note that a revised ITR is filed under Section 139 (5) of the Income Tax Act, 1961. When submitting a revised ITR, you are required to mention the acknowledgement number of the original ITR and its filing date.

Importance of ITR Verification

When filing an ITR for the first time, it is known as an original ITR and is submitted under Section 139 (1) of the Income Tax Act. Verifying the ITR within 30 days of filing is crucial to complete the tax filing process. Failure to verify your ITR renders it invalid, potentially leading to penalties or consequences. Therefore, it is crucial to ensure timely verification to avoid any complications.

Caution While Filing Revised ITRs

While there is no limit to the number of times an ITR can be revised, it is important to exercise caution and avoid unnecessary revisions. Filing multiple revised ITRs without valid reasons can attract scrutiny from the income tax department. It is advisable to thoroughly review your ITR before submission to reduce the chances of errors or omissions.

Key Deadlines

The last date to file the original ITR for individuals whose accounts are not required to be audited for the fiscal year 2022-23 (assessment year 2023-24) is July 31, 2023. However, the deadline for filing a revised ITR for this period is December 31, 2023. It is crucial to adhere to these deadlines to avoid any complications or penalties.

Recommendations from Chartered Accountants

According to tax experts and chartered accountants, if a mistake is realized after submitting the ITR but before verification, it is advisable to first verify the original ITR. Once verified, you can file a revised ITR to rectify the errors. This approach ensures compliance with the rules and regulations set by the income tax department.

In conclusion, filing an Income Tax Return (ITR) accurately is important to ensure a smooth and hassle-free tax filing process. However, mistakes can happen, and it is crucial to be aware of the appropriate steps to rectify them. By verifying the original ITR and subsequently filing a revised ITR, taxpayers can correct any errors or omissions and maintain compliance with the income tax regulations. Remember to review your ITR carefully before submission to minimize the chances of mistakes, ensuring a seamless tax filing experience.

Income tax return (ITR) forms can lead to confusion if you do not calculate your income or deductions properly. So, what can you do if you make a mistake in your ITR but realise it after submitting but before verifying it? Can you skip verifying the wrong ITR and file it afresh or do you need to verify the ITR already filed and then file a revised ITR to correct the mistake?

If you want to file the unverified ITR afresh and try to upload/file a corrected ITR without verifying the first one, the income tax portal will not allow you to do so. Also, even if, due to a system glitch, you are able to upload a new ITR without verifying the first one you are likely to get a notice from the tax department. If you verify the first ITR and then a new one – the new ITR will be considered as a revised ITR.

As per the rules, if you file an ITR but do not verify it, the tax return is not considered valid, and the tax filing process is incomplete. It’s essential to verify the ITR within 30 days of filing to avoid any penalties or consequences. If you accidentally submit an ITR without verifying it and want to revise the ITR due to any error or omission, you need to first verify the original ITR and only after this can the second ITR be filed

When an individual files an ITR for the first time, it is considered an original ITR. This ITR is filed under Section 139 (1) of the Income Tax Act, 1961. However, a revised ITR is filed under Section 139 (5) of the Income Tax Act. When a revised ITR is filed, an individual is required to mention the acknowledgement number of the original ITR filed and the date of filing the original ITR.

one cannot file another ITR without verifying the first one. The income tax e-filing portal will show an error at the time of final submission. Bangar says, “If an individual submits an ITR and discovers an error before verifying it, then one will be required to verify it. Once the original ITR is verified, then an individual can file the revised ITR to correct the mistakes made in the original ITR.

When an individual tries to upload a fresh ITR without verifying the first ITR, the income tax department shows the error.

The last date to file the original ITR for individuals whose accounts are not required to be audited is July 31, 2023 – for FY 2022-23 (AY 2023-24). However, the last date to file a revised ITR for this period is December 31, 2023.
While an original ITR can be filed only once, there is no limit to the number of times an ITR can be revised. But tax experts advise individuals against revising ITRs unnecessarily. This can raise a query from the income tax department.

An ITR filed but not verified will reflect in the income tax system. Hence, even if an individual is able to file another ITR and verifies it, the income tax department can raise a query about two ITRs filed by an individual against the same PAN.

Hence, according to these chartered accountants, it is advisable to first verify the ITR filed originally and then file the revised ITR again to correct mistakes.

Income tax return: Steps to e-file ITR-2 on the income tax portal

Steps to e-file ITR-2 on the income tax portal

Step 1: Go to https://www.incometax.gov.in/iec/foportal and log in with your PAN/Aadhaar and password.

Step 2: Go to E-File Income Tax Returns File Income Tax Return from the menu.

Step 3: Select the assessment year 2023-24 and mode of filing as ‘online’ and click ‘Continue’ to proceed. The assessment year 2023-24 is to be chosen to file ITR for FY 2022-23. If you are uploading a JSON file generated from the department’s utilities, you must select the mode of filing as offline.

Step 4: Select your status as individual and click ‘Continue

Step 5: From the dropdown of ‘ITR Form’, select ‘ITR-2’.

Step 6: Usually people file ITR when their income is above maximum exemption limit. However, even if the total income of an individual does not exceed the maximum exemption limit, ITR filing is mandatory in certain situations. Select the reason for which you are filing the Income-tax Return and click ‘Continue’.

Step 7: On the next page, you will be provided with the option to select the applicable schedules. The mandatory schedules will be pre-selected for you. You can choose the additional schedules based on the nature and sources of income you need to report in the ITR. For instance, if you have income from the sale of cryptocurrency (Virtual Digital Assets), you should select the ‘Schedule VDA’. Depending on your specific requirements, you can add various schedules as applicable.

Step 8: Reporting of Salary Income in ‘Schedule S’.

If you have switched jobs in FY 2022-23, it is necessary to report salary income from all employers in this schedule. You should obtain Form 16 from each employer to help you file ITR.

For each employer, you need to provide the employer’s name, TAN if TDS is deducted, address, and nature of the employer. To report the salary income, you need to provide a detailed breakup of salary components, including basic salary, allowances, and details about perquisites (such as accommodation, interest-free or concessional loans, free education, gifts, vouchers, employee stock options, etc.). You also need to report any profits received in lieu of salary, such as compensation for termination of employment, payments from provident funds, payments under a keyman insurance policy, etc.

You can refer to PART B of Form 16 and Form 12BA for a comprehensive breakdown of the salary components. These documents provide detailed information regarding the various elements included in your salary.

To illustrate, let us consider the case of Mr. A, who received a salary from XYZ Private Limited. His salary components are as follows:

  •  Basic Salary: Rs. 7,00,000
  • House Rent Allowance (HRA): Rs. 3,50,000
  • Leave Travel Allowance (LTA): Rs. 1,80,000
  • Children Education Allowance (CEA): Rs. 5,000
  • Work from Home Allowance (WFH): Rs. 45,000
  • Gifts vouchers: Rs. 1,40,000.

The exempted components of these allowances are as under:

  • Exempted portion of HRA: Rs. 2,40,000
  • Exempted portion of LTA: Rs. 1,00,000
  •  Exempted portion of CEA: Rs. 1,200

When reporting salary income in ITR-2 form, the details should be filled in as follows:

The allowances that are eligible for exemption under Section 10 should be reported separately in ‘Schedule S’ manually. The exempted component of these allowances will be deducted from the gross salary once we fill in the details of allowances to the extent exempt under section 10.

The Income-tax Act provides three deductions while computing the income chargeable under the head of salaries:
a) Standard Deduction of Rs 50,000,
b) Deduction for Entertainment Allowance and
c) Deduction for Professional Tax.

A Standard Deduction of Rs. 50,000 is an absolute and unconditional deduction allowed to an employee, and it does not require any supporting evidence or investment. This deduction can be claimed only once per year, regardless of the number of job changes during that period. Further, this deduction can be claimed only if one opts for the old tax regime for FY 2022-23.

Step 9: Reporting of Capital Gains in ‘Schedule CG’.
Any profit or gain arising from the sale of a capital asset is taxable under the head of the capital gains. To accurately report capital gains, you must specify the type of capital assets you have sold. In the event of the sale of equity shares and having both long-term and short-term capital gains during the year.

To illustrate, Mr. A has sold listed equity shares of Rs. 10 lakh during the year. Out of this amount, Rs. 6 lakh represents long-term shares, with a cost of acquisition of Rs. 4 lakh. The remaining Rs. 4 lakh represents the sale of shares resulting in short-term capital gains, with a cost of acquisition of Rs. 3.5 lakh.

The tax on the capital gains arising from the sale of equity shares depends upon two factors. First, whether the capital gains are long-term or short-term, and second, whether the shares are unlisted or listed on the stock exchange. Equity shares listed on India’s stock exchanges are treated as short-term capital assets if held for not more than 12 months immediately preceding the date of transfer. They are treated as long-term capital assets if held for more than 12 months.

These transactions should be reported in ITR-2 as follows:

Reporting of Short-Term Capital Gains from Listed Equity Shares: Short-term capital gains arising from the sale of listed equity shares are taxable at a concessional rate of 15% plus surcharge and cess if the transaction is chargeable to the Securities Transaction Tax (STT). In Schedule CG, enter the details of the full value of consideration and deductions. The capital gains shall be auto-computed:

Reporting of Long-Term Capital Gains from Listed Equity Shares: Long-term capital gain arising from the sale of listed equity shares is not taxable if the aggregate amount of capital gain during the year does not exceed Rs. 1,00,000. If the amount of capital gain exceeds Rs. 1 lakh in a FY, then the excess amount shall be taxable at rate of 10%. To report long-term capital gains/loss on listed equity shares, units of the equity-oriented mutual fund or units of business trust, you need to Select Schedule 112A.

While selecting the details of shares acquired, you must select whether the shares were acquired on or before 31st January 2018 or after 31st January 2018. This is done to avail the benefit of grandfathering provision. The CBDT has clarified that the scrip-wise details are required to be filled up for those shares that are eligible for grandfathering. If you have to fill in the details of the shares acquired on or before 31st January 2018, you need to enter the scrip-wise details of each such share. Further, the ISIN Code, name, number, sale price and fair market value per share as on 31st January 2018 need to be entered.

The details filled in ‘Schedule 112A’ will get auto-populated in ‘Schedule CG’

Step 10: Reporting of Income from Other Sources in ‘Schedule OS’.
Income from other sources is a residual head of income that captures all such incomes which are not classified under the other four categories. However, certain incomes will always be taxable under the head of ‘income from other sources’, inter-alia, winning from lotteries, gifts, interest on enhanced compensation, etc.

In this schedule, one shall report incomes such as dividends, interest from savings accounts, deposits and income tax refund, family pension, gifts etc. These are taxed at normal income tax rates. Income from winning from lotteries, crossword puzzles etc. are taxed at specified tax rate. You can also claim deductions for expenses that can be subtracted from the income taxable under the head of other sources. It should be noted that the deduction of up to Rs 10,000 under Section 80TTA for the interest earned on savings bank deposits can be claimed under the ‘Total Deductions’ section and not under ‘Schedule OS’.

For instance: Mr. A has received income from various sources, including interest on saving deposits of Rs. 20,000, interest from term deposits of Rs. 34,000, and interest on income tax refund of Rs. 7,500. He has won a lottery prize of Rs. 2,00,000. These sources of income should be reported in Schedule OS as follows:

It is essential to report the quarterly breakdown of specific incomes, such as dividends and winnings from lotteries in ‘Schedule OS.’ This quarterly reporting is mandatory to qualify for the relaxation from interest payable due to deferment in advance tax payment. The Income tax law provides relief on the payment of interest due to difficulty in predicting such income.

After completing all the schedules related to income, it is important to claim deductions for eligible tax-saving investments. Also, provide the necessary information regarding taxes paid, including TDS from Salary/Other than Salary, TCS, Advance Tax, and Self-Assessment Tax. Once all the required details are filled in the form, click on “proceed” to preview the return. If the filled-in information is accurate, you can proceed to submit ITR.

Once the ITR is submitted, don’t forget to verify the ITR within 30 days of submission.

New Look of “INCOME TAX RETURN ACKNOWLEDGEMENT” for FY 2022-23 & AY 2023-24

New Look of “INCOME TAX RETURN ACKNOWLEDGEMENT” for A.Y.2023-24

Excel utilities of ITR 1 and ITR 4 for AY 2023-24 are available for filing. Click here to download.

ITR 1

For individuals being a resident (other than not ordinarily resident) having total income upto Rs.50 lakh, having Income from Salaries, one house property, other sources (Interest etc.), and agricultural income upto Rs.5 thousand.

Document

Utility Excel Based

zip (Version 1.0) (2.40MB)

Date of release of first version of utility25-Apr-2023

Document

Schema

zip (13KB)

Date of first release of JSON Schema11-Apr-2023

ITR1_Notified Form AY 2023-24

zip (410 KB)

ITR 2

For Individuals and HUFs not having income from profits and gains of business or profession

Document

Schema

zip (40 KB)

Date of first release of JSON Schema12-Apr-2023

ITR2_Notified Form AY 2023-24

zip (1513 KB)

ITR 3

For individuals and HUFs having income from profits and gains of business or profession.

Document

Schema

zip (73 KB)

Date of first release of JSON Schema14-Apr-2023

ITR3_Notified Form AY 2023-24

zip (2260 KB)

ITR 4

For Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE and agricultural income upto Rs.5 thousand.

Document

Utility Excel Based

zip (Version 1.0) (3.63MB)

Date of release of first version of utility25-Apr-2023

Document

Schema

zip (23 KB)

Date of first release of JSON Schema11-Apr-2023

ITR4_Notified Form AY 2023-24

zip (473 KB)

For persons other than- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7

Document

Schema

zip (76 KB)

Date of first release of JSON Schema20-Apr-2023

ITR5_Notified Form AY 2023-24

zip (2147 KB)

For Companies other than companies claiming exemption under section 11

ITR6_Notified Form AY 2023-24

zip (3125 KB)

ITR 7

For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only

ITR7_Notified Form AY 2023-24

zip (2210 KB)

Changes in big income tax rules! see list

There are many changes in the income tax rules effective from this financial year. Changes in income tax slabs to tax rebate limit raised, No LTCG tax benefit on some debt mutual funds are some of the major changes effective from 1 April 2023.

1) New income tax regime to be default regime

Starting, 1 April 2023, the new income tax regime will act as the default tax regime. Tax assessors will still be able to choose from the prior regime. Salaried and pensioners: the new system’s standard deduction for taxable income exceeding Rs.15.5 lakhs is ₹52,500. The government in Budget 2020-21 brought in an optional income tax regime, under which individuals and Hindu Undivided Families (HUFs) were to be taxed at lower rates if they did not avail specified exemptions and deductions, like house rent allowance (HRA), interest on home loan, investments made under Section 80C, 80D and 80CCD. Under this, total income up to ₹2.5 lakh was tax exempt.

2) Tax rebate limit raised to ₹7 lakh

The enhancement of tax rebate limit to ₹7 lakh from ₹5 lakh  means that the person whose income is less than ₹7 lakh need not invest anything to claim exemptions and the entire income would be tax-free irrespective of the quantum of investment made by such an individual.

3) Standard deduction

There is no change in standard deduction of ₹50000 provided to employees under old tax regime. For pensioners, the finance minister announced extending the benefit of standard deduction to new tax regime. Each salaried person with an income of ₹15.5 lakh or more will benefit by ₹52,500.

4) Changes in Income Tax slabs

The new tax rates are

0-3 lakh – nil

3-6 lakh – 5%

6-9 lakh- 10%

9-12 lakh – 15%

12-15 lakh – 20%

above 15 lakh- 30%

5) LTA

The leave encashment for non government employees is exempt up to a certain limit. This limit was ₹3 lakh since 2002 and is now increased to ₹25 lakh

6) No LTCG tax benefit on these Mutual Funds

From April 1, investments in debt mutual funds will be taxed as short-term capital gains. The move would strip investors of the long term tax benefits that had made such investments popular.

7) Market Linked Debentures (MLDs)

Also, investment in Market Linked Debentures (MLDs) post April 1 will be short term capital assets. With this, grandfathering of earlier investments will end and the impact on the mutual fund industry will be slightly negative. 

8) Life Insurance policies

Proceeds from life insurance premium over the annual premium of ₹5 lakh would be taxable from new financial year i.e. from 1st April 2023. Finance Minister Nirmala Sitharaman, while presenting Budget 2023, aslo announced that the new income tax rule won’t be applicable on ULIP (Unit Linked Insurance Plan).

9) Benefits to Senior Citizens

The maximum deposit limit for senior citizen savings scheme will be increased to ₹30 lakhs from ₹15 lakhs.

The maximum deposit limit for monthly income scheme will be increased to ₹9 lakhs from 4.5 lakhs for single accounts and ₹15 lakhs from ₹7.5 lakhs for joint accounts.

10) Physical gold conversion to e-gold receipt not to attract capital gains tax

While presenting Budget 2023, Sitharaman said there will not be any capital gain tax if physical gold is converted to an Electronic Gold Receipt (EGR) and vice versa. This will be effective from 1 April 2023.

2,09,06,829 number of Income tax Returns (ITRs) filed by during FY 2022-23 till date

For individual taxpayers between the age of 18 to 35 years, 2,09,06,829 ITRs filed, and Rs 93,318 crore paid in gross taxes, before claim of refund, during FY 2022-23 till 31st January 2023


For individual taxpayers below age of 18 years, 4,861 ITRs filed and paid Rs 6.31 crore gross taxes, before claim of refund, during FY 2022-23 till 31st January 2023Posted Date:- Feb 06, 2023

2,09,06,829 number of Income tax Returns (ITRs) filed by individuals (between age of 18 to 35 years) during FY 2022-23 till 31st January 2023. This was stated by the Union Minister of State for Finance, Shri Pankaj Chaudhary, in a written reply to a question in Lok Sabha today.

 As per Income-tax Act, 1961, tax is calculated and collected based on total income returned in ITR. Total Income includes income from different heads of income such as income from salary, income from house property, income from profit and gains from business or profession, income from capital gains and income from other sources. Tax is not collected separately under different heads. Rs 93,318 crore is the gross taxes paid as per ITRs filed, before claim of refund, the Minister stated.

For below the age of 18 years, the Minister further stated that 4,861 number of ITR filed were by individuals during FY 2022-23 till 31st January 2023. The Minister stated that this category taxpayers paid Rs 6.31 crore gross taxes as per ITRs filed, before claim of refund. As per Income-tax Act,1961, tax is calculated and collected based on total income returned in ITR. Total Income includes income from different heads of income such as income from salary, income from house property, income from profit and gains from business or profession, income from capital gains and income from other sources. Tax is not collected separately under different heads.