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India Today
24-07-2025
- Business
- India Today
Filed the wrong ITR form? Here's how to fix it to avoid penalty
Filing your Income Tax Return (ITR) often feels like ticking off a major task on your to-do list, until you realise you've picked the wrong form. Don't worry, you're not alone. With multiple income streams and varied deductions, it's surprisingly easy to select the incorrect ITR. The good news? You usually have time, and ways to fix taxpayers only spot mistakes after hitting 'Submit'. Filing the wrong form can snowball into bigger headaches later, from refund delays to unexpected penalties. But tax experts say you do have ways to set things right, provided you act spoke to CA (Dr) Suresh Surana and Pankaj Aneja, Partner Taxation, ASA & Associates LLP, to understand what to do if you've filed the wrong YOU CAN REVISE YOUR ITRThe first step is to check if you can file a revised return. Surana explains, 'A taxpayer can revise their ITR if an error or omission is found after submission. This is allowed under Section 139(5) of the Income-tax Act. A revised return can be filed at any time 3 months prior to the end of the relevant assessment year or the completion of the assessment by the income tax authorities, whichever is earlier.' Simply put, if you filed your original return on time, just log in to the Income Tax e-Filing portal, select the 'Revised Return' option, enter the acknowledgement number of your original ITR, choose the correct form for your income situation, make the necessary changes, and don't forget to e-verify Aneja adds, 'The revised return fully replaces the original return and must be filed by December 31 of the relevant assessment year (or any extended timeline). Multiple revisions are permitted within the allowable timeframe.'WHAT IF YOU MISS THE REVISION DEADLINE?Panic usually sets in if you spot the error after the window for revising your return closes. But all is not lost. There are still options, but with a few points out, "If the mistake is found after the revision window closes, you can file a rectification under Section 154. This provision enables the correction of mistakes that are factual and do not require extensive verification or fresh investigation. Another option is the Updated Return under Section 139(8A). This lets you correct mistakes within 48 months from the end of the relevant assessment year, but you'll need to pay additional tax."Aneja explains, 'Once the revision deadline is over (i.e., post December 31 of the assessment year or after the assessment is complete), the usual revision isn't possible. However, you can file an "Updated Return" under Section 139(8A) with payment of additional tax.''A updated return can be filed one time with no further revision permitted thereafter,' he also shared the timeline and additional tax rates for filing an Updated Return: Credit: Pankaj Aneja, Partner Taxation, ASA & Associates LLP However, you cannot use this option in every case. For instance, you can't file an Updated Return to declare a loss, reduce your tax bill, or claim a bigger refund. Also, if the tax department has already started or completed a search, survey, or assessment under different sections of the Income Tax Act, you cannot use this option, Aneja CORRECTING YOUR ITR INVITE TROUBLE?One common worry is whether fixing your ITR will attract scrutiny. The short answer, not says, 'There's no rule that simply revising your ITR automatically flags you for scrutiny. But if you make frequent or major changes, it can catch the attention of the tax department's AI systems.''Substantial revisions or multiple corrections could signal carelessness or an attempt to hide income, which might raise a red flag. If your revised return still doesn't match the information in Form 26AS, AIS, or TIS, expect a notice or scrutiny,' he ITR FORM CAN DELAY YOUR REFUNDFiling the wrong form can cost you time and money. Surana explains, 'If the form used does not correspond to the taxpayer's actual sources of income or claimable deductions, the return may be classified as defective under Section 139(9) of the IT Act. In such cases, the return may either be rejected or require rectification within a stipulated time.'Using the right ITR form is important because each one is designed for certain types of income. For example, you can't use ITR-1 if you have foreign income. If you have capital gains, you may need ITR-2 or ITR-3. Getting it right the first time saves time, money, and unnecessary stress. For instance, if you have foreign income, you can't use ITR-1. If you have capital gains, you may need ITR-2 or WAIT, FIX IT EARLYIf you've filed the wrong form, don't wait for the tax department to flag it. The sooner you fix it, the better your chances of avoiding late fees, interest, or missed the right form and careful filing, your tax return can be hassle-free, and you won't have to lose sleep over a simple double-check your form before you file. And if you do slip up, remember, you still have time to set it right.- Ends
News18
06-05-2025
- Business
- News18
New TDS Rule Under Section 194T: Challenges & Implications; Explained
The Finance (No. 2) Act 2024 introduces Section 194T, mandating a 10 percent TDS on payments exceeding Rs 20,000 to partners. Authored by Y Ramakrishnan, (Executive Partner, Taxation), ASA & Associates LLP: The Finance (No. 2) Act 2024 has brought forth Section 194T, a new provision mandating a 10% TDS on payments exceeding Rs 20,000 during the financial year made by firms to their partners as salary, remuneration, bonus, commission, or interest. This introduction raises several critical questions, particularly concerning its impact on small and professional firms and the resulting cash flow implications for individual partners, especially in light of the revised new tax rates for Individuals under the Finance Act 2025. A key concern arises from the fact that many partners in smaller firms might not have a taxable income under the new tax regime. Consequently, the mandatory TDS under Section 194T could lead to unnecessary upfront tax deductions and subsequent delays in refunds. Further the provisions of Section 197, which typically allows taxpayers to apply for a lower or nil TDS certificate is also not amended to include Section 194T. This absence of a direct relief mechanism leaves partners with limited options to mitigate the impact of the new TDS. The implementation of Section 194T also necessitates a careful consideration of its interplay with existing provisions like Section 40(b)(v), which governs the deductibility of partner remuneration for the firm, and Section 40(a)(ia), which addresses the non-deductibility of certain expenses if TDS is not deducted. The question remains whether the 30% disallowance under Section 40(a)(ia) would apply to the entire payment made to the partner or only to the portion exceeding the permissible limit under Section 40(b). This distinction has significant implications for the firm's tax liability. However, those not adhered to the provisions of Section 194T, may plead under section 201 to escape from the penalty consequences. If a partner meets the conditions outlined in the first proviso to Section 201(1) – filing their return, including the firm's income, and paying their due tax – the firm may not be deemed an 'assessee in default' for not deducting TDS and avoid potential penalties proceedings etc., To avail this relief under Section 201, the partner is required to furnish a certificate from an accountant confirming their compliance with the conditions in prescribed form No.26A However, the proviso to section 201(1A) regarding interest on tax will be applicable on the tax amount not deducted from the partners payment till the date of filing of his return of income. There are various contrary views regarding charging of interest is not applicable if the payee did not have any taxable income. In conclusion, while the introduction of Section 194T presents a potential cash flow challenge for partners in small businesses and professional firms. The CBDT should consider the inclusion of section 194T also for the purpose of claiming lower deduction certificate to mitigate the challenges faced by the small firms. It is authored by Y Ramakrishnan (Executive Partner, Taxation), ASA & Associates LLP The views expressed in this article are those of the author and do not represent the stand of this publication. First Published:
