After a taxpayer files ITR (Income Tax Return), the tax department checks the return and issues an intimation notice. The intimation includes the return details of the taxpayer. A mismatch in the orders of the Assessing Officer can be handled in the following ways – agree with the IT department and pay what they demand and file for rectification. Section 154 of the Income Tax Act works on the errors arising from the tax returns of an assessee. Keep reading this article to get an overview of this crucial provision!
Section 154 involves correcting any errors arising from the tax details. It also includes rectification of orders from an Assessing Officer. Corrections can be made for orders passed under Sections 206CB(1), 200A(1) and 143(1).
However, only obvious mistakes from the intimation notice can be considered for rectifications. Sections 206CB(1) and 200A(1) involve processing and rectifying mistakes in TCS (Tax Collected at Source) and TDS (Tax Deducted at Source) statements. Section 143(1) covers summary assessment and issuing intimation notices.
Some of the basic features of this Section are as follows:
Also Read: Section 193 Of The Income tax
Section 154 of the Income Tax Act considers the following mistakes for correction:
Some illustrations of these mistakes are as follows:
You cannot send a correction request for modifying your address or bank account details in tax returns.
The following orders can be rectified under the notice or order of an Income Tax Officer or Assessing Officer:
Follow the below-mentioned pointers to file for rectification under Section 154 of the Income Tax Act:
After submission, you will get a Reference Number and your application will go to Bangalore, CPC. After examining the request, the tax authority will issue an order.
While filing a rectification request under Section 154 of Income Tax, you have to comply with the following terms and conditions:
Also Read: Section 115BA Of The Income Tax Act
Rectification requests can only be made under some specific conditions. These are called “mistakes apparent from records”. By records, the documents are referred based on which the rectification can be made i.e., Form 16, Form 26AS, deduction proof, income statement etc.
A taxpayer can file for rectification within four years from the end of the financial year in which the intimation that needs to be amended was passed. The order doesn’t necessarily have to be an original; it can be an amended or rectified order.
Rectification can only be filed after the return is processed or intimation under Section 143(1) is received. If rectification is filed for an order then it can be filed within 4 years from the end of the financial year in which the order needs to be rectified was passed. However, a revised return can be filed before completion of the assessment or the end of the relevant assessment year, whichever is precedent.
Before filing income tax returns, taxpayers must carefully compute the tax implications and exemptions. Section 154 of the Income Tax Act only encourages error corrections apparent from tax records. If you have filed your ITR online, a rectification request must be generated online. Read the regulations of the IT department carefully before submitting applications for rectifications.
Ans: The time limit for Section 154 of the Income Tax Act is 4 years. After 4 years, the order of rectification cannot be passed.
Ans: Partnership firms, individuals and HUF who have opted for presumptive income scheme u/s 44ADA can submit the ITR-4 form. However, the following cases are not a part of this form:
Taxpayers whose accounting records need to be audited as per the IT Act.
Earnings from other sources, house property or salary that exceed Rs. 50,00,000.
An organisation’s director investing in unlisted shares cannot use it.
Ans: Form 26AS refers to a statement that showcases any amount subtracted as TCS or TDS from a taxpayer’s earnings. It also gives information about a taxpayer’s high-valued financial transactions, self-assessment tax, advance tax and foreign remittances.
Ans: Companies that do not claim tax exemptions u/s 11 can file their tax returns in the ITR-6 form. All companies registered under the Companies Act 2013 or Companies Act 1956 have to file this form. Section 11 offers exemptions to companies that earn from properties used for religious or charitable activities.
Ans: Form 16A denotes a TDS certificate that highlights TDS on earnings (except salary income). It includes TDS subtracted on:
– Interests from fixed bank deposits
– Rent receipts
– Insurance commission
It carries information such as challan of TDS deposits, TAN/PAN, address and name of deductee and deductor.
Ans. If you have your ITR filed online, then you have to submit a rectification request for the same online through the e-filing portal.
Ans. No, a rectification request once submitted cannot be withdrawn. It will be closed only after a rectification order is passed.
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