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Rectification under Section 154 of Income Tax Act

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Sakshi Shah

Income Tax
Rectification Section 154
Refund & Notices

As part of the return filing process, the Income Tax Department processes an ITR and sends intimation u/s 143(1) to the taxpayer. Intimation u/s 143(1) matches the data as per ITR filed by the taxpayer with the calculations computed by the Income Tax Department. In the case of a mismatch, the taxpayer has an option to file rectification under Section 154 of the Income Tax Act. Both the taxpayer and the assessing officer has the right to make correction in the Income Tax Return. They can file rectification for a time limit of upto 4 years from the end of the financial year.

Correction of Errors under Rectification Request

A taxpayer or assessing officer can file rectification u/s 154(1) for a mistake which is apparent from record. They can file rectification for the following types of errors:

Examples

Do not use rectification request for changing bank account or address details of your Income Tax Return
Tip
Do not use rectification request for changing bank account or address details of your Income Tax Return

Who should file Rectification under Section 154 of Income Tax Act?

A taxpayer can file a rectification request for a mistake apparent from record. Further, the income tax officer can also file rectification on its own to rectify a mistake.

The taxpayer can file a rectification request once the ITR is processed by the income tax department. If there is a change in income, taxpayer should file a Revised Return u/s 139(5) instead of rectification u/s 154.

A taxpayer can file rectification for the following reasons:

How to file rectification online u/s 154 of Income Tax Act?

  1. Login Income Tax Website

    Login to your account on the income tax website using a valid username i.e. PAN and password.

  2. E-File > Rectification

    Go to E-file and select the option ‘Rectification’ from the dropdownRectification Section 154 - Income Tax Account Navigation

  3. Enter details

    Select ‘Income Tax’ under the option of order to be rectified. Further, select the Assessment Year and enter the reference number mentioned in the CPC order under the tab ‘Latest Communication Reference Number’. Click on ‘Validate’Rectification Section 154 - Enter Details

  4. Select type of rectification request

    Based on the type of rectification request the taxpayer selects, they need to enter additional details to submit the rectification request.

  5. Correction of data for Tax Credit mismatch

    If there is a tax credit mismatch, the taxpayer can make corrections to TDS (Tax Deducted at Source), TCS (Tax Collected at Source), or Income Tax details in the Income Tax Return. Select the relevant checkbox, click on Submit and enter the data for correction.

  6. Return Data Correction (XML) for correction of data in ITR

    If the taxpayer wants to change any data in the ITR Schedule, they can select the specific reason and upload a new XML with the changes in the ITR.Rectification Section 154 - Return Data Correction (XML)

  7. Re-process the ITR

    When there is an error in the calculation by the income tax department and the taxpayer does not want to change any data in the ITR, they can request for re-processing the ITR. The taxpayer should select the checkbox of the relevant reason i.e. Tax credit mismatch or tax/interest computation and click on submit to reprocess the ITR. There is no need to upload an XML.Rectification Section 154 - Reprocess the ITR

  8. Reference Number

    Once the taxpayer successfully submits the rectification request, the system generates a reference number and sends it to CPC Bangalore for processing. Once the request is processed, the rectification order under Section 154 of the Income Tax Act is issued.

FAQs

What is the time limit to file Rectification under Section 154 of the Income Tax Act?

Both the taxpayer and assessing officer have the right to file a rectification request under Section 154. The time limit to file rectification is up to 4 years from the end of the financial year in which the order sought to be rectified was passed. For example – the intimation order u/s 143(1) for ITR of FY 2018-19 was passed in FY 2019-20. The taxpayer can submit a rectification request up to 4 years i.e. up to 31st March 2024.

I want to rectify my Bank Details in the ITR? Can I file a Rectification request under Section 154?

If you want to make changes in Bank Details, do not file a rectification request under Section 154. Instead, you should file a Revised Return under Section 139(5) with the correct bank details.

What is the difference between Rectification Return and Revised Return?

Revised Return is filed by the taxpayer to rectify errors made while filing the original ITR. It can be filed before the end of the assessment year or completion of the assessment of ITR whichever is earlier.
Rectification Request is filed by either taxpayer or assessing officer to rectify any mistake apparent from record. It can be filed up to four years from the end of the financial year in which the order sought to be amended was passed.

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