Defective ITR: If your income tax return is found defective, the Income Tax Department will notify you of the defect through a notice issued under section 139(9) of the Income Tax Act. This notice will be sent to your registered email address or by post. You can access and view the notice by logging into the e-filing portal. According to reports, the number of taxpayers receiving or likely to receive ‘Defective ITR’ notices from the income tax department is higher this year compared to previous years.
An income tax return (ITR) may be labeled as ‘defective’ due to various reasons. Some common reasons for this could include discrepancies such as mismatched names between the PAN card and the filed ITR, claiming TDS credit without reporting the related income. Upon receiving such a notice, it is essential to rectify the identified defect within the allocated timeframe, typically set at 15 days.
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“A return may be treated as defective on account of incomplete or inconsistent information in the return or in the schedules or for any other reason,” the Income Tax department said on its website.
Mihir Tanna, Associate Director, S.K Patodia & Associates LLP, a CA firm told the Economic Times: “Some of our clients have got a defective ITR notice because the income shown in AIS/Form 26AS is not matching with the ITR, when in fact it indeed matches. In another case the tax department said that a particular income cannot be shown in ITR-1, whereas it can indeed be shown in ITR-1 and the law explicitly does not bar showing it in ITR-1.”
What to do if you get a Defective Return Notice
When encountering a defective return notice under Section 139(9) concerning your income tax filing, it is vital to understand the implications and the corrective actions required. Making errors in your tax return is common, especially if you are not accustomed to the process. The notice issued by the income tax department is intended to guide you in rectifying these errors promptly.
1. The Income Tax Department will send a notice under section 139(9) to the email address linked with the income tax department. The email subject will state ‘Communication under section 139(9) for PAN AWZXXXXXXX for the Assessment Year 2023-24’.
2. If you are inquiring about the password required to access the notice issued under section 139(9), please be informed that the defective return notice is enclosed in the email and it is password protected. To unlock the defective return notice under section 139(9), the password is the PAN in lowercase followed by the date of birth in the DDMMYYYY format.
3. The taxpayer will be asked to revise the return within 15 days to address the defects identified by the Income Tax Department. In the event that it is not possible to make the necessary revisions within this timeframe, you are permitted to apply for an extension.
4. Failure to rectify the defects within 15 days or the extended timeline provided may result in return being deemed invalid. This could have implications such as incurring interest, penalties, inability to carry forward losses, and forfeiture of specific exemptions.
5. If changes are not made to the defective Income Tax Return (ITR) within the specified time frame, you will have to submit it as a fresh or revised return. You will be required to address the Notice under section 139(9). Failure to respond to the notice may result in the return being deemed as invalid or not filed for that assessment year.
How to revise your income tax return
1. An income tax return (ITR) may be marked defective for various reasons. One common reason for receiving a defective notice is due to a mismatch between the information in Form 26AS and the details provided in your ITR. It is essential to rectify any discrepancies to comply with tax regulations.
To address a defective notice related to Form 26AS, the first step is to download Form 26AS from the Income Tax portal. Upon reviewing the form, ensure that you have correctly reported all sources of income on your tax return, particularly focusing on income where tax has been deducted at source.
Examples of such income include:
interest income from term deposits,
dividend income, or
any other income subject to tax deduction.
When filing your revised ITR, it is important to accurately disclose both your income and the corresponding tax deductions. Failure to report the income but claiming the tax deducted at source may lead to a situation where you receive a defective notice from the tax authorities again. Review and update your ITR to avoid such discrepancies and potential penalties.