Discard ITR Facility: The Income Tax Department has introduced an important functionality on its website using which taxpayers can waive their previously filed but not verified Income Tax Returns (ITRs). Earlier, taxpayers were allowed to amend returns only in case of errors or omissions in returns. The Income Tax portal has introduced a new feature that allows users to ‘Skip ITR or Discard ITR’ for unverified original, delayed, or revised income tax returns, from assessment year 2023-24.
This is a good move by the Income Tax Department as it will increase the ability of taxpayers to extend revision of their income tax returns, which was earlier limited by abstentions and errors. “Tarun Kumar Madan, tax head, of Coherent Advisors, said, ‘However, as of now there is no provision in the law for omitting income tax returns, so its legal validity may be in question going forward.
This Discard ITR option can be used again and again, provided the status remains unverified or subject to re-verification, even for income 24 within the prescribed time limit for filing the income tax return. Once an income tax return is omitted, it cannot be restored. This action is consequential and hence means that the income tax return was not filed publicly.
Discard ITR facilities
The FAQs issued by the Income Tax Department state, “The user can avail the option “Discard ITR” if he/she does not have to verify it, which is required under ITR section 139(1)/139(4)/ Are being filed under 139(5). The user is provided the facility to file a new ITR by omitting the previous ITR that was previously unverified. However, if “ITR filed u/s 139(1)” is omitted and the subsequent return is filed after the due date u/s 139(1), it will attract delayed return u/s 234F, etc. Surveillance may come.
Therefore, it is suggested that before discarding any previously filed return, it is recommended to check that the return is valid for the U.S. Whether the due date of filing u/s 139(1) is available or not. It is not mandatory to file a West ITR if you have left an earlier unverified ITR. However, it is expected that if the taxpayer has already uploaded the return data, it is generally expected that he will file another ITR later.
If you have sent your ITR V to CPC and it is on the way, but you realize that the details were not reported correctly, you are clearly advised not to discard such returns.
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Preconditions for discarding ITR feature
- The original ITR should not be verified using any online or offline ITR verification methods.
- The original ITR should be for FY 2022-23 (Income 2023-24) and onwards. This means that any ITR filed after April 1, 2023, can be deleted from the income tax records.
If a person is using the ‘Discard Return’ feature, he or she should be aware of the consequences of using it. The tax department has clarified in the detailed FAQs on ‘discarded returns’ on its website, “If the ITR filed under section 139(1) is discarded and at any time after the date If the return is filed, it will have to face the consequences of belated return under section 234F, etc.
Therefore, before discarding any already filed return, it is advisable to ensure whether the due date for filing a return under section 139(1) is available or not.
How can you use discarded ITR facilities?
Here’s how to use the discard return feature as per the tax department.
Step 1: Log in to www.incometax.gov.in.
Step 2: Go to ‘e-File’ and select the ‘Income Tax Return’ option.
Step 3: Click on ‘E-Verify ITR’. There will be a button titled ‘Cancel‘.
What is ITR?
ITR stands for Income Tax Return which is mandatory to be filed if the total income during the previous year of the creditor crosses the basic exemption limit (i.e. Rs. 2,50,000 for an individual below 60 years of age). An income tax return is filed by the creditor to share the list of his total income including exempted income, available exemptions, and current taxes paid during the previous year. The benefits of filing income tax returns are:
- You can refund TDS (if any).
- This is necessary if you are thinking of a loan from a bank or other financial institution.
- This is required if you want a visa to travel abroad.
- You can carry forward the loss by filing an ITR.
ITR Filing Benefits
As a responsible and compliant citizen, you should file tax returns. Following is the list of its benefits:
- When you apply for a loan for a home, car, or medical treatment, tax returns for the last three years are required.
- Submitting your tax return helps in getting visa approval. Some foreign embassies such as Australia, UK, USA, and Canada require the previous year’s tax return for visa processing.
- According to Section 281 of the Income Tax Act, if you are involved in a foreign or high-value transaction, such as transferring assets, you must provide a Tax Clearance Certificate (ITR).
What if I don’t file ITR?
If you are wondering “What if I don’t file ITR on time”, see below. Here are some consequences of late filing of ITR:
- Penalty charges
- No carry forward of losses
- Interest on the tax amount