You are a taxpayer, it doesn’t mean you only make mistakes, sometimes the Income-tax department also makes mistakes due to some technical glitch.
In this article, we will learn about mistake rectification under section 154 of income tax act.
Before moving ahead:
Table of Contents
What is section 154 of Income Tax
Income tax rectification has executed both ways from the individual (taxpayer) or by the department itself.
Mistakes made by you can be rectified by simply filing a revised income tax return u/s 139(5).
The process of rectification under section 154 of the income tax act.
Two ways can be used to rectify the return
- The Income Tax Department itself send a rectification notice if it finds any discrepancies in the process.
- The taxpayer should apply and inform the department about the mistake.
Also Read: – E-verify Income Tax Return.
Rectification under section 154
The kind of errors falls u/s 154 during filling income tax return.
- Error in facts (real true)
- Arthimatic (calculation mistakes)
- Advance tax amount difference
- The difference in amount tax credit
- Some additional information discloser error
- Gender error
Features of Section 154
- The Income-tax department sends you the notice due to some mistakes or errors like gender, tax credit mismatch, refund mismatch or advance tax discrepancy.
- If any action is taken under section 154 results in addition of tax payable, or deduction in the amount of exemptions, the IT department should notify to the respective taxpayer regarding the same and allow him to explain the discrepancy found.
- If any action is taken under Section 154 results in a decrease in the amount of tax payable or increase in the amount of exemptions, then the IT Department should provide the refunds to the taxpayer.
- If the refund to the taxpayer is made and after rectification, the refund amount comes to be less, in that case, the income department asks for a refund.
How to file rectification return u/s 154? Step by Step Guide
Step 1: – Log in to Income Tax Website using your login ID.
Step 2: – Move your cursor to ‘efile’ drop down and click rectification mentioned in the red block.
Sep 3: – Select return to being rectified. (Income tax return or Wealth tax return).
Step 4: – Select an assessment year (dropdown option).
Also Read: – Check Income Tax refund Status
Step 5: – You will get 4 options
- Tax credit mismatch correction only.
- Return data correction (XML)
- Only reprocess the return
- Additional information for 234C
Step 6: – You must comply with the instruction by selecting the options, your rectification falls under.
Step 7: – Click submit.
If the taxpayer applies for the rectification, the assessing officer should either accept or refuse the rectification form within six months from the end of the month in which the rectification is filed.
What is the Time limit for rectification under section 154?
It is very important to understand the time limit for rectification u/s 154. Rectification of ITR is permitted only up to 4 years of filing your return. The period of 4 years is from the date of the order sought to be rectified and not 4 years from the original order.
If the taxpayer applies for the rectification, the Assessing Officer should either accept the rectification or refuse it within six months from the end of the month in which the rectification is filed.