The deadline to submit a income tax return (ITR) was approved on July 31, 2024, after which eligible taxpayers received a refund or an income tax notice (ITR) informing them that there was something wrong with their income tax return (ITR).
It could be due to a Return of defective IT or a pending assessment. Let us understand more about this here:
What is a defective IT return?
A tax return is considered defective if it contains incomplete or inconsistent information, whether on the return, in the schedules, or for any other reason.
If your return is found to be defective, the Income Tax Department will send you a notice of defects under section 139(9) of the Income Tax Act by email to your registered email address or by post. You can view the notice by logging into the e-filing portal.
“A defective return notice may have been sent due to any of the following reasons: you under-reported income, i.e. you declared less income than you actually had, you filed the return on the wrong income tax form, you did not disclose fixed deposit income or investment income, etc.,” says Chirag Chauhan, a Mumbai-based certified chartered accountant.
“However, regardless of the faulty declarations, tax refunds are 30 to 35 percent lower this year compared to last year,” he added.
What are the common mistakes?
Common errors that cause a return to be “defective” include the following:
A. Gross income shown in Form 26AS on which TDS credit has been claimed is greater than the total income shown under all income heads.
B. There is a discrepancy between the taxpayer’s name on the PAN and the name on the income tax return.
C. TDS credit has been claimed but corresponding receipts/income have been omitted.
How can the defect be corrected?
If defects are detected in the declaration, the taxpayer has 15 days from the date of receipt of the notification to correct the defect in the declaration filed. He may even request a deferral and apply for an extension.
In addition, a taxpayer may authorize another person to respond to the defective notice under section 139(9).
Meanwhile, if you do not respond to the defective notice within the stipulated period, then your return may be deemed invalid and therefore consequences such as penalties, interest and non-carryover of losses may occur.
Personal income tax refund growth has decreased by 30%.
Why are refunds slow this year? @IncomeTaxIndia @nsitharaman image.twitter.com/1fTB2c1yiN
– CA Chirag Chauhan (@CAChirag) August 12, 2024
What is a pending assessment?
There might be some delay in getting refunds when there is a pending evaluation or reassessment. Recently, the income tax department has shared a fictitious email to explain why tax refunds are being delayed due to pending assessment.
It says the refund was processed under section 143(1) and the refund was withheld due to pending assessment.
The mail sent by the tax department reads as follows: “Your return/order for the financial year 2022-23 has been processed/accounted under section 1431a on 29th July, 2023. Since there are pending assessment/reassessment proceedings in your case, the release/withholding of refund will be based on the reply provided by the Jurisdictional Assessing Officer (JAO) in accordance with the provisions of section 245(2) of the Income Tax Act, 1961.”
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