An amended return refers to a revised income tax return filed by a taxpayer to correct errors or omissions in the original filing. Under the Income Tax Act, individuals and businesses can file a revised return if they discover mistakes, such as inaccurate income reporting, incorrect deductions, or missed exemptions.
The revised return must be filed within the same assessment year or before the completion of the assessment, whichever is earlier. Filing an amended return ensures tax compliance, corrects underreported income, and helps claim missed deductions or refunds, ultimately avoiding penalties for inaccurate filings.
Key Aspects of Amended Returns in India
Eligibility:
- Any taxpayer—whether an individual, firm, or company—who has already filed their income tax return can file an amended return if they discover mistakes or have more accurate information after filing.
- Revised returns are permitted for both original returns and belated return.
Time Frame for Filing:
- An amended return must be filed within the end of the relevant assessment year or before the completion of the assessment by the tax department, whichever is earlier. For example, if you filed a return for FY 2022-23 (AY 2023-24), the amended return can be filed up to March 31, 2024, provided the tax assessment has not been completed.
Common Reasons for Filing Amended Returns:
- Incorrect income reporting: If any income was unintentionally omitted from the original return.
- Deductions or exemptions missed: If the taxpayer forgot to claim certain deductions or exemptions, such as under Sections 80C or 10(14).
- Incorrect tax computation: If taxes were miscalculated or incorrect tax liability was reported.
- Change in financial details: When additional information about income or expenses becomes available after the original filing.
- Correction of personal details: If there were errors in the taxpayer’s name, PAN, or bank account details.
Filing Process:
- The taxpayer must log in to the e-filing portal of the Income Tax Department (https://incometaxindiaefiling.gov.in).
- Select the option to file a revised return under Section 139(5).
- Use the same ITR form that was used for the original return, but this time mark the return as revised.
- Provide the 15-digit acknowledgment number from the original return when filing the revised one.
Restrictions:
- A taxpayer can revise their return multiple times, but this must be done within the specified time frame.
- The revised return must completely replace the original return, meaning it should include all correct and unchanged information, not just the corrections.
Consequences of Not Filing an Amended Return:
- Failure to correct mistakes in the original return may result in penalties, interest, or scrutiny from the tax authorities.
- If additional taxes were due and not reported, the taxpayer may face penalties for underreporting income.
- Conversely, failing to claim deductions or exemptions can lead to missed refunds.
Benefits of Filing Amended Returns:
- Avoiding Penalties: Correcting errors proactively can help avoid penalties and interest charges.
- Claiming Refunds: If errors led to overpayment of taxes, filing a revised return can help recover the excess as a refund.
- Ensuring Accuracy: Amended returns help ensure that the final tax filings accurately reflect the taxpayer’s financial situation.
After Filing:
- Once an amended return is filed, the tax department may take some time to process it and may issue a revised assessment notice or refund, if applicable.
- The taxpayer can track the status of their revised return and any potential refunds through the e-filing portal.
Conclusion
Filing an amended return in India is a vital process that allows taxpayers to correct errors in their original tax filings, ensuring compliance with the law and accurate tax reporting. Whether it’s to rectify underreported income, claim missed deductions, or correct personal information, an amended return provides an opportunity for taxpayers to avoid penalties, ensure proper tax liability, and receive potential refunds. However, it must be done within the prescribed time limits, and the revised return completely replaces the original one, ensuring all information is accurately updated.
