Can I File a Revised Income Tax Return?

A revised income tax return can be filed when a taxpayer realizes that there were errors or omissions in the original return they filed. This provision ensures that taxpayers can correct their mistakes without facing harsh penalties, as long as the revision is done within the allowed timeframe. Filing a revised return can also help avoid discrepancies that may arise during assessment or audits by the Income Tax Department.

Steps to Take for Filing a Revised Income Tax Return:

Review Your Original Return:

Carefully check for errors or omissions, such as unreported income, incorrect deductions, or mismatched figures. Common mistakes might include forgetting to declare interest from savings accounts, or incorrect reporting of taxable income or exemptions.

Eligibility to File a Revised Return:

You are eligible to file a revised return if the original return was filed within the due date of the income tax return (i.e., before the end of the relevant assessment year). Even if you initially missed the deadline for the original return, you can still file a revised return within the specified timeline.

File the Revised Return Under Section 139(5):

Under Section 139(5) of the Income Tax Act, a taxpayer can file a revised return if they discover any mistakes or omissions. This can be done after the original return has been filed. A revised return can be submitted:
Before the end of the assessment year, or
Within 12 months from the end of the relevant assessment year, whichever is earlier.

Correct the Mistakes:

Make the necessary corrections. For example, if you forgot to mention income from other sources, you should add that income in the revised return. If you mistakenly claimed higher deductions, correct them.
Make sure to re-calculate your total income, tax payable, and deductions accordingly.

Ensure Proper Documentation:

When filing a revised return, make sure you reference the original return by mentioning the acknowledgment number of the first return.
Clearly specify that the return you are submitting is a revised return and that it supersedes the earlier one.

Pay Any Additional Tax Due:

If the revisions result in a higher taxable income and an increase in your tax liability, you will need to pay the additional tax due. This must be done promptly to avoid interest or penalties.
In case you have paid more tax than required, you can request a refund while submitting the revised return.

Submit the Return:

Once you’ve made all the necessary corrections and paid any additional taxes, submit the revised return electronically (or physically, as per the applicable rules). The revised return should be filed on the Income Tax e-filing portal.

Legal Actions and Protections:

Time Limit:

The key deadline for filing a revised return is 12 months from the end of the assessment year or before the end of the relevant assessment year (whichever is earlier). For example, if you filed your original return on July 31, 2024, for the assessment year 2023-2024, you can file the revised return by March 31, 2025.

No Penalty for Timely Revision:

If you file the revised return within the prescribed time limit, the Income Tax Department will not impose penalties for the original mistakes or omissions. However, if the tax due is higher than the originally filed return, you may be charged interest under Section 234A, 234B, or 234C for late payment.

Refunds:

If the revised return shows a lower tax liability, you are eligible for a refund. The refund can be processed after the revised return is accepted by the department.

Assessment Process:

The revised return will replace the original return, and any assessment or scrutiny will be based on the revised figures.

Example:

Let’s say Mr. Sharma filed his income tax return for the assessment year 2023-24 on July 31, 2024, and later realized that he forgot to include interest income from his savings bank account amounting to ₹10,000. The original return incorrectly showed ₹2,00,000 as taxable income, but after including the bank interest, the total taxable income becomes ₹2,10,000.

Mr. Sharma can file a revised return by March 31, 2025, before the deadline. He would:
Correctly declare ₹2,10,000 as taxable income.
Recalculate the tax payable.
If the revised return results in additional tax, he will pay the outstanding amount along with interest.
By doing this, Mr. Sharma ensures that he complies with the tax laws, avoids penalties, and receives any refund he may be entitled to if overpaid earlier.