How to File Revised Income Tax Returns

Benjamin Franklin aptly remarked. ‘In this world, nothing can be said to be certain except death and taxes!’. As per the latest government data, it is estimated that 1.5 crore Indians, or 1% of our population, pay taxes. Of these, people earning less than 2.5 Lakhs per annum constitute 57% of all taxpayers whereas individuals earning over 50 Lakhs per annum account for only 1% of the country’s taxpayers.  While the Income tax authorities have provided ample resources and an online tax filing portal to simplify the tax filing process and encourage individuals to pay tax, as individuals shift to e-filing rather than taking the help of Chartered Accountants, it is quite common to make mistakes while filling your income tax return. Mistakes can range from claiming the wrong deductions, incorrect disclosure of interest income, to mentioning the wrong bank account numbers and incorrect challan number etc.  While making an error in filing your income tax return seems dreadful for an honest hardworking individual, the tax authorities have put in place rules to rectify genuine mistakes. Section 139 (5) of the Income Tax Act 1961, allows taxpayers to rectify their mistakes by filling a revised income tax return before the end of the relevant assessment year, or before completing the assessment, whichever is earlier.  So, for the financial year 2018-19, the assessment year would be 2019-20. In case you made any errors in filing the income tax returns in AY 2019-20, then you can file revised income tax returns for AY 2019-20 till 31st March 2020. But due to the ongoing COVID19 pandemic, the date for filing revised income tax returns for AY 2019-20 has been extended to 30th November 2020. 

In this blog, we will cover the following: 

1. What is a revised income tax return? 
2. What errors can be rectified by submitting a ‘rectification request’ under section 143(3) of the Income tax Act? 
3. What is the difference between rectification request and revised return? 
4. When to file a revised income tax return?
5. Who can file a revised income tax return? 
6. How many times can you file a revised income tax return? 
7. What is the last date for filing revised income tax returns? 
8. When is the last date for filing revised income tax returns for AY 2019-20?
9. How to file revised income tax returns? 
10. How to generate the acknowledgment number? 

What is a revised income tax return? 

As the name suggests, a revised income tax return is re-filing your income tax return for a particular year in case there is any error or omission in the originally filed return. When you make an error while filing your taxes, you can correct these errors in two ways: 

1. By submitting a ‘rectification request’ under section 154 of the Income Tax Act,1961
2. By filing a revised income tax return under section 139 (5) of the Income Tax Act,1961

What errors can be rectified by submitting a ‘rectification request’ under section 143(3) of the Income tax Act? 

Genuine clerical errors, mathematical mistakes, mismatch in tax payments, incorrect income head, change in residential status etc can be rectified by submitting a rectification request: You can file a rectification request within 4 years from the date of receiving the intimation under section 143(1).

What is the difference between the rectification request and revised return? 

Once you file your income tax returns, the same is assessed by a ‘Assessing Officer’ (AO). Post the assessment, if there is any discrepancy between the return filed by you and the return calculated by the assessment officer, then you have 2 options: 

1. Rectify the mistake by submitting a rectification request
2. Pay the differential tax amount

So, the primary difference between a rectification request under section 154 and filing a revised income tax return under section 139 is that a rectification request is submitted after you submit your tax return and the same has been assessed by an AO whereas filing a revised return is done prior to assessment by the AO. 

When to file a revised income tax return? 

If you have made a mathematical error or shown income under the wrong head, then you can submit a rectification request. But if you have forgotten to include income or deductions then it is recommended to file a revised income tax return.  It is important to remember that once the assessment of your ITR is completed by the assessing officer, then you cannot file a revised return. Post the scrutiny of your tax return you can only submit a rectification request. 

Who can file a revised income tax return? 

Every assessee (i.e. taxpayer) who has filed his/her income tax is allowed to file a revised income tax return. Earlier only those assessee’s who had filed their returns before the deadline were allowed to file a revised income tax return but from FY 2016-17 even a belated return can be revised. 

How many times can you file a revised income tax return? 

While there is no limit on the number of times you can file a revised income tax return, it is recommended to disclose all incomes, deductions, interest incomes correctly to avoid undue scrutiny from the IT department. 

What is the last date for filing revised income tax returns? 

A taxpayer can file a revised income tax return any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.  For example, for the financial year 2019-20, the assessment year would be 2020-21, so in case you make any errors in filing the income tax returns for 20-21 then you can file revised income tax returns till 31st March 2021. 

When is the last date for filing revised income tax returns for AY 2019-20?

For the financial year 2018-19, the tax payable would be in assessment year 2019-20. Ideally the last date for filing revised income tax returns would have been 31st March 2020 but due to the COVID19 pandemic, the deadline was revised from 31st March 2020 to 30th June 2020 to 30th September 2020. But the final deadline for filing revised income tax returns for AY 2019-20 is 30th November 2020. 

How to file revised income tax returns? 

The income tax department has put in place a simple mechanism through which taxpayers can file revised income tax returns. You can follow the below steps to file a revised income tax return. 

Steps to file revised income tax returns for AY 2019-20: (ITR - 1 & ITR - 4 only)

1. Visit https://www.incometaxindiaefiling.gov.in

 2. Login to the e-filing portal by entering your user id (PAN), password, captcha code, and click ‘login’.  3. Click on the ‘e-file’ menu and click ‘income tax return’ link.  4. On the income tax return page, your PAN number will be pre-filled. You need to fill in the following details:

• Select the assessment year
• Select the ITR form number
• Select filing type as ‘revised return’
• Select ‘prepare and submit online

5. In the online ITR form, under the ‘general information tab’ select the ‘return filing section’ as ‘revised return under section 139(5) and return filing type as ‘revised’.  6. Enter the acknowledgement number and date of filing of the original (incorrect) income tax return.  7. Fill or correct the relevant details on the online income tax return form and submit the rectified ITR.  8. E-verify the returns via Aadhaar, OTP, EVC through net banking for faster processing and quicker refunds or send the physical ITR through normal or speed post to the Centralised Processing Centre, Income tax department, Bangalore - 560500.

Steps to file revised Income tax returns AY 2019-20: (For all ITRs)

1. Visit https://www.incometaxindiaefiling.gov.in 2. Download the appropriate ITR under downloads > offline utilities > income tax return preparation utilities 3. Extract and open the utility.  4. In the ITR utility, choose the section ‘revised return under section 139(5) and filing type as ‘revised’.  5. Enter the acknowledgment number and date of filing of the original (incorrect) income tax return.  6. Fill or correct the relevant details and generate the XML.  7. Login to the e-filing portal by entering your user id (PAN), password, captcha code and click ‘login’ 8. Click on the e-file menu and click ‘income tax return’ link.  9. On the income tax return page, your PAN number will be pre-filled. You need to fill in the following details: 

•   Select the assessment year
•   Select the ITR form number
•   Select filing type as ‘revised return’
•   Select ‘submission mode’ as ‘upload XML’ and click on submit. 

10. Upload the XML in the e-filing portal and e-verify the returns via Aadhaar, OTP, EVC through net banking for faster processing and quicker refunds or send the physical ITR through normal or speed post to the Centralised Processing Centre, Income tax department, Bangalore - 560500.

How to generate the acknowledgment number? 

Acknowledgment number is compulsory for processing a revised income tax return. In case you do not remember your acknowledgement number or the date of filing the original return, you can go to ‘my accounts > ’view e-filed returns/forms’, choose income tax returns from the drop-down and click submit. 

Conclusion: 

Every year, after the income tax returns have been filed, the tax department sends scrutiny notices to thousands of taxpayers. While getting a tax scrutiny notice might seem like a nightmare, it is merely a routine check-up by the IT department and does not imply that you are guilty. There has been a significant reduction in the tax scrutiny notices from 0.71% in 2015-16 to 0.25% in 2018-19. But given a choice, it is always better to disclose and file correct income tax returns and avoid filing multiple revised income tax returns.  A common issue faced by many individuals while filing taxes is segregating their investments. Therefore it is advisable to hold two separate Demat accounts from an income tax point of view - one for trading and the other for long-term investments. This is because otherwise, in certain cases, assessing officers may decide that all transactions are of a trading nature and classify the income as business income, which is taxable at higher rates. Segregating the two accounts clears all doubts and will ensure that you can enjoy the benefits of lower capital gains on long-term investments.  You can open a 3-in-1 account with Samco, India’s best equity stockbroker as awarded by CNBC Awaaz, and get a Demat account, an online trading account, and a mutual fund investment account.    Albert Einstein was spot on when he said, ``The hardest thing in the world to understand is the income tax!”, but we genuinely hope this article cleared your doubts on filing revised income tax returns. Remember the deadline for filing belated and revised income tax returns for AY 2019-20 is 30th November 2020, so hurry!