Introduction to Income Tax Return (ITR) Correcting an Incorrect Assessment Year

When filling an Income Tax Return (ITR) and inaccuracies arise, such as using the incorrect assessment year (A.Y.), it can lead to mandatory corrections. This article provides detailed steps on how to address such an error, ensuring compliance with tax regulations.

Understanding the Impact of an Incorrect Assessment Year

The assessment year (A.Y.) is a critical component of any ITR as it determines the relevant tax year. If the A.Y. is incorrectly selected, it can lead to financial and legal repercussions. For example, late fees might be imposed, or the ITR might be processed as a revised return if certain conditions are met.

Potential Scenarios and Corrective Actions

Closing out the false return or revising the selected assessment year can be done through specific methods. Here, we discuss the different scenarios and the appropriate steps to take:

Scenario 1: Late Fees under Section 234F

If you have already submitted a return for an incorrect A.Y., such as 2019-20, you may incur late fees under Section 234F due to the wrong assessment year. To rectify this:

Reach out to a professional tax advisor to analyze the situation.

Prepare a revised return for the correct A.Y. providing the relevant income and deductions.

File a fresh return for the correct A.Y. (2020-21 in this case) to overwrite the incorrect one.

Scenario 2: Revision Under Section 139(5)

If you have inadvertently filed a return for the wrong A.Y., you can rectify it by:

Using Section 139(5) to revise the return with the correct assessment year.

Entering the acknowledgement number of the original return if necessary.

Renaming the original return as a revised return and uploading the revised data for the correct A.Y.

Scenario 3: Using the Incorrect Form

If the incorrect assessment year was due to an error in using the wrong form, the return will be treated as defective and not processed. The appropriate action is to:

File a revised return using the correct form for the correct A.Y.

Ensure that the correct details and relevant income and deductions are included.

Advice from Tax Experts

Expert opinions highlight the importance of careful review and professional assistance in correcting ITR filing errors. Notable tax professionals, such as CA. Bhavesh Savla, suggest:

Seeking professional advice for a thorough analysis of the error.

Revoking the incorrect return if possible, and filing a new one with the correct A.Y.

Using Section 139(5) for revisions, if the incorrect return is classified as revised.

Conclusion

Incorrect assessment years in ITR filing can lead to various complications. However, with the proper steps and professional guidance, these errors can be rectified. It is crucial to follow the guidelines provided by tax authorities and consult with tax experts to ensure compliance with tax regulations.