FAQ on Information Concerning Defective Income Tax Return in ITR E Filling 2.0

We all as responsible taxpayers try to file our returns properly but sometimes we may miss any information or commit any error due to which our return gets defective and the Income Tax Department issues a notice in lieu of the return for correction of errors. The Income Tax Portal has been improved a lot since its initiation making it simple for its users. Before going deep into the article, let’s first try to understand the ITR new portal and how is it different from the old one.

Table of Contents

When was the new ITR Portal 2.0 launched? What benefits does it provide?

The ITR E Filling portal was launched on June 7, 2021 by the Income Tax Department. It provides an ease to the taxpayers to do the ITR preparation and filling in a complete hassle freeway. The returns get processed timely and in a simple manner. All the pending actions for example if any return is required to be e-verified or any return has to be submitted are shown on the dashboard so that the taxpayers can complete the activities required by the site.

What is the difference between the new and the old portal?

The new portal E-Filling 2.0 is quite speedy in processing returns and providing refunds as compared to the old portal. Earlier there were no facilities of FAQ’s or Video Tutorials in the old portal to guide the users, but in the new portal 2.0, the facility of FAQ’s has been enabled. By giving answers to a few questions returns can be easily filed in the new portal. However, this was not the case in the old structure where the forms were quite long and monotonous.

In the old portal the income tax site redirected to the different sites like NSDL for payment but now payment or any other facility can be easily availed through the income tax portal itself. All the information regarding uploads, verification etc. is displayed on the dashboard of the new portal 2.0.

What does Defective Return actually mean?

The name defective implies that the original return has not been compiled and filled properly. There are certain details which are either incomplete or have been shown wrongly. For this reason, the Income Tax Department is forced to send or issue a notice to the assessee or the taxpayer telling him/her to rectify the information or give the requisite details by filling a revised return.

What is the time limit to file a defective return?

The assessee is supposed to rectify the errors within a period of 15 days starting from the date when the notice or intimation is received by the assessee. If the assessee fails to reply to such notice or fails to rectify the defect within a period of 15 days, the Assessing Officer shall treat the return as Invalid. But if the assessee gives a justified reason for not being able to file the return within 15 days and does it after the expiry of the said period, the Assessing Officer can consider the delay and treat the return as valid.

How to basically detect the errors?

Often the taxpayers commit errors that may be commonly seen or some errors might be significant making the complete ITR wrong and requiring a lot of analysis to review and rectify it. It’s important for the taxpayer to look for the reasons why the error occurred, how did the return go wrong, what information was put in which was not actually demanded by the return. Without considering the root cause, the defect in the return will not be detected in a better way.

What errors can make a return defective?

There are certain errors that can render a return defective.

  1. ITR is Incomplete or the details are wrong
    • If the return filed by the assessee is incomplete that is if any detail, statement, or annexure required to be provided is not given, the return shall be rendered defective or
    • If the assessee provides wrong details in the return like turnover or professional receipts, salary details, any other income or deductions, etc. the return shall be rendered defective.
    • For example a salaried employee failed to give the complete details of allowances received by him from the company where he works or any individual not disclosing his other income like investment details.
  1. Information about taxes paid is missing
    If the details of taxes paid, interest, and late fee are missing like challan number, BSR code, or date is not given, the return can go defective.
  2. Difference in Tax Payable or Taxes Paid
    If there are variations in tax payable and tax actually paid, the Income Tax Department can issue a notice of defective return
  3. Difference in the name
    If there is a mismatch in the name mentioned in PAN Card or Aadhar Card or the Income Tax Profile made, the return becomes defective and the department issues notice.
  4. Taxes are unpaid
    In case the taxes are not paid or partially paid, the return gets defective and the Income Tax Department can issue a notice
  5. Books and Accounts are not maintained
    If the return is filled without preparing Balance Sheet and Profit and Loss Account and such financial statements are mandatorily required to be maintained, the Income Tax Department issues a notice of Defective return.
  6. Presumptive Taxation
    If the presumptive income is less than 6% or 8% of the gross receipts, and ITR-3 needs to be filed but ITR-4 is filed or the gross receipts under Section 44AD are shown more than Rs 2 crore, also if return under Section 44ADA is filed showing gross receipts more than Rs 50 lacs without Balance Sheet, notice will be received as the return shall be considered defective.

How to file correction under the Income Tax Site in case of defective return

  1. The response to the notice of defective return can be easily submitted by logging into the Income Tax Website
  2. Searching the ‘Pending Actions Tab’, clicking on it, and selecting the E-Proceedings
  3. Such notice can be easily figured on the E-Proceedings Tab and a reply can be submitted by giving a justified answer.

Conclusion

Though it might seem a little difficult to go through the Income Tax Return once again and rectify the errors experienced in the original return but still it is evident that the Government gives a chance to remove the faults and file a revised return so that all the details are submitted correctly in a proper and organised way.

CategoryIncome Tax

Annuradha Yadav is a semi-qualified chartered accountant and pursuing CA Final. She is a Commerce Graduate and working with Goyal Mangal & Co. as an intern for the past one year. She has good command over ROC Compliances, Tally, various audits, Trademark Filing and has an interest in writing articles.

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