10 Points to consider for filing Revised Income Tax Returns [Last Date: December 31, 2024]
The tax season is like a box of chocolates—sometimes you get a sweet refund, and sometimes, a bitter notice. With the last date to revise your Income Tax Return (ITR) looming (December 31, 2024), taxpayers have one last chance to fix mistakes, avoid penalties, and make peace with the taxman. Here’s a lighthearted look at why revising your ITR could save you from future tax nightmares.
1. Errors in incorporating some Income?
At the time of filing the original ITR, Mistakes in reporting income, such as Dividend, Interest on SB A/c, Interest income from co-op societies, etc often happens. Not incorporating it in the ITR results in the penalty of mis-reporting or under-reporting. A revised return in such a scenario may help in avoiding future scrutiny or penalties due to inaccurate reporting.
2. Form 26AS, AIS, and TIS have Changed?
Form No. 26AS/AIS are dynamic statements which keep changing on the basis of information updated by the reporting entities. Taxpayers may recheck 26AS/AIS to see if any further change is required in the ITR already filed and may consider filing the revised return. It may be noted that any mismatch can lead to:
a) Automated tax demands under Section 143(1)(a).
b) Further scrutiny or audit by the tax department.
Revising your return ensures you’ve reconciled all reported entries.
3. Missed Deductions or Exemptions?
In the rush to file, taxpayers often forget to claim eligible deductions or exemptions such as:
a) Section 80C: Investments in ELSS, PPF, or insurance premiums.
b) Section 80D: Medical insurance premiums.
c) HRA or other applicable allowances.
Better late than never. Filing a revised return allows you to correct these omissions and optimize your tax savings.
4. Not reported Exempt Income because its Tax Free?:
Many taxpayers miss reporting exempt income, such as:
a) Insurance Maturity Proceeds
b) PPF Interest
c) Agricultural income
d) LTCG up to Rs. 1 Lakh on equity shares, etc.
Even if the agricultural income is tax free, one may note that it is subject to aggregation rules whereby certain tax liability is there as a result of this income. Further, disclosure of agricultural income in the ITR also justifies that the land is used for agricultural purposes which is relevant while claiming the profit on sale of agricultural land as exempt. Irrespective of the tax free nature of other exempt income, its disclosure justifies the financial transactions and prevents future issues during assessments. It’s not just about taxes; it’s about transparency.
5. Not claiming the benefit of Loss Carry forward?:
Failure to report business losses or capital gain losses in the original return prevents it from carrying them forward for set-off against future income. Revising the original return filed within the due date with an unreported loss figure reinstates the right to claim such benefits in subsequent years.
6. Included Foreign Assets and Income in the ITR?:
Penalties under the Black Money Actare no joke. Resident taxpayers must declare all foreign assets and income. Missing these details in the original ITR could attract:
a) Penalties under the Black Money Act.
b) Notices for incomplete reporting.
A revised return ensures compliance with the reporting norms and avoids a non –discretionary penalty of Rs. 10 Lakh.
7. Disclosed all Bank Accounts in ITR?:
As a general rule, taxpayers are required to report all the bank accounts ITR. By revising the return, one can add unreported banking account details as well.
8. Wish to avoid additional Tax cost & Interest?:
If taxpayers don’t revise the ITR timely by filing the revised return before 31stDec, the next option would be filing the Updated Return (ITR-U) within the next 2 years. However, Updated Returns Come with a Price Tag, as under:
a) Additional tax applies: 25% extra on tax dues for filings within 12 months, and 50% extra for filings beyond that.
b) It is one-shot deal. Once filed, taxpayers can’t re-file an updated return for the same year.
c) Taxpayers in whose case income tax raid has been carried out or where income tax survey (Other than TDS survey) has been conducted or in case any proceeding for assessment or reassessment or re-computation or revision is pending, etc, are not allowed to file the updated return.
9. Family Members income Clubbed in ITR?
Income of minor children or spouses (from investments made using your funds) must be clubbed with your income. If overlooked, this could lead to scrutiny or additional tax demands. Revising your ITR ensures compliance with clubbing provisions.
10. Wish to avoid Future Notices or Assessments?
Errors in ITR may trigger income tax notices or assessments under Sections 143(2) or 148. Filing a revised return proactively addresses these issues, reducing the likelihood of legal or financial repercussions.
Practical Tips for Revising Your ITR
1. Review Past Filings: Cross-check details with Form 26AS, AIS, TIS, and bank statements.
2. Ensure Compliance: Verify that all income, deductions, and exemptions are correctly reported.
3. Act before December 31, 2024: The window for filing a revised return closes after this date.
The opportunity to revise your income tax return allows taxpayers to rectify errors, claim missed benefits, and ensure full compliance with tax laws. Avoid procrastination — review your ITR today and file a revised return if needed. The effort taken now can save significant time, money, and stress in the future.
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