How to make income tax rectifcation application online

Receiving  notice from income-tax department becomes common today. Thanks to technological improvements and automated world of software coding. Often these software coding require modifications (rectification) that triggers mismatches and issues in the CPC Processing of income-tax returns. We could see that tax payers are saying that they are not getting the refund as claimed, or their tax payment were not considered by CPC or not tagged in their accounts on account of the system being followed in the tax mechanism.

Historically, whoever files his return on time (within due date), they gets priority for refunds in time. Even after filing the return online in time, tax payer may suffer due to TDS Credits mismatch, Advance tax and Self-assessment tax Credits mismatch. Many times the tax payer commits mistake by quoting TAN instead of PAN and vice versa and some time the bankers’ mistakes. Consequent to mismatch, an intimation u/s 143(1) will be send by CPC online within a year from the end of year in which return was filed, beyond which the intimation has no validity. This intimation meant for reconciling tax payers assessment of income and CPC assessment of income based on tax credits found in Form 26AS. Upon receipt of deviation the tax payer can file a rectification online.

Section 154 of the Income-tax Act, 1961 empowers Assessing Officer to rectify any order passed under this act on account mistake apparent on record either by own motion or based on application made by the tax payer. Tax professional may agree with me that it is tedious to deal with rectifying mistake through online rectification petition but possible. To make it clear the Income-tax Department has come out with detailed rectification mechanism which will provide considerable options to minimize the work of Assessee to get intimations u/s 143(1) rectified online.

It is pertinent to note that the time limit given at the bottom of the Intimation u/s 143(1) shall not be missed out at any cost. This is because files are being transferred from CPC to concerned Assessing Officers based on time deadline, beyond which your rectification petition will also be rejected and you will be directed to contact your assessing officer. If rectification petition filed online within 30 days from the date of intimation, there is a chances of getting it re-processed online without pain or else it is tedious to followed and get it rectified as this is manual process.

How to rectify online?

Once logged in you can find “My Account”. Under “My Account” there is a tab called “Rectification Request” which will allow you to file your rectification online on submission of CPC Communication reference number which is mentioned in the intimation u/s 143(1). You have to select the assessment year for which you wanted to file rectification. Remember only cases where you have received intimation u/s 143(1) can be considered for online rectification as it requires reference number of those intimation automatically sent by CPC. Cases where no intimation received u/s 143(1), you may go to “Request for Intimation u/s 143(1)/154” and request for copy of intimations already sent (but lost or unable to retrieve etc). Upon request the system (CPC) will forward the copy of intimation u/s 143(1) directly to the registered e-mail address. It may take few days to get it. Upon receipt of the same you can proceed to rectify using the procedure given above.

On providing valid Communication reference and date of order, you will be provided with a “Rectification Request Type”. There are three categories provided which will cover all the required corrections, they are namely:-

1. Tax Payer is correcting data for tax credit mismatch only
2. Tax Payer is correcting the data in rectification
3. No further data correction required. Reprocess the case.

A. When you select the category 1-“ Tax Payer is correcting data for tax credit mismatch only” the following will be displayed for correction

• TDS on Salary details –

This is meant for providing information about your employer, TAN of employer, Income under the head salary and Tax deducted on it. You can enter details for more than on employer

• TDS on Other than Salary details

This is meant for providing information about name of the deductor, TAN of the deductor, Tax deducted and TDS claimed for the year. You can enter details for more than one party.

• IT Details

This is meant for providing correct information about your advance tax and self-assessment tax challan details. In many case Assessee used to enter wrong information or the banker would have updated with incorrect information. In these cases you can first visit your Form 26AS to find out exact details of tax credits and then try for rectification. Even a very small mistake will give big difference and you will get intimation to pay tax along with interest. The following details can be corrected under “IT Details”.

a. BSR Code
b. Date of Deposit
c. Serial number
d. Amount

In this tab you can provide correct information to process your return further.

B. When you select the category 2-“Tax Payer is correcting the data in rectification”, you have choose the options given for type of rectification required for you. The following are the list (for time being) for your reference:-

1) The tax payment had not matched as per the CPC Order

2) Income chargeable under the head business or profession has been wrongly considered

3) Requesting for cancellation of adjustment of earlier year(s) demand

4) Details of deductions (including sub-schedule 80G, 80IA, 80IB, 80IC etc.) under chapter VIA wrongly considered

5) Income chargeable under the head capital gain wrongly considered

6) Income chargeable under the income from house property wrongly considered

7) Salary income not matched

8) Income chargeable under the income from other sources wrongly considered

9) Brought forward losses have not been allowed OR partially allowed.

10) Current year losses have not been set off correctly

11) There is a variance in tax /Interest computation even though Total income remains the same

12) Profit before tax in Schedule BP has been wrongly considered

13) Requesting to tax to slab rates, as it is AOP as seen from schedule for partner’s information of the e-filed return of income

14) Gender of tax payer was wrongly considered. Gender updated in PAN database.

15) MAT/MATC have not been allowed OR partially allowed.

16) Requesting for reduction of tax rate as domestic company instead of non-domestic company.

17) Date of filing of the ORIGINAL RETURN taken as NOT WITHIN DUE DATE.

18) Requesting for reduced claim of income, as taxpayer is governed by Portguese civil code and that Sec 5A is applicable to them

19) Requesting for allowing the claim of deduction u/s 80P

20) Requesting for change of Residential status

21) Requesting that the income shown in the return is not taxable as the Assessee is a society registered u/s 12A OR Assessee is NON-RESIDENT.

22) Others.

On selecting the appropriate item it will direct you as to what to do in each case. In most of the cases you need to upload the rectified xml file and wait for the rectification order.

C. When you select the category 3-“No further data correction required. Reprocess the case.” you have to choose the options given for type of rectification required in this case. They are

• Tax Credit Mismatch
• Gender Mismatch
• Tax/Interest Computation

Conclusion & Tips to avoid rectifications:

The following measures will make tax payer’s and tax professional’s job easier. When you file income tax return just follow the under mentioned tips:

1. Use correct ITR Form and fill it (duly) with correct data.
2. Before filing return verify Form 26AS for TDS Credits, Advance Tax Credits and Self-Assessment Tax Credits so as to enter correct bank details or TDS details. In most of the cases tax credit mismatch is the issue.
3. File the return in time. (Within due date)
4. When you get intimation u/s 143(1), follow the instructions given under that and take remedial action in filing rectification request immediately when there is a mistake apparent on record or make payment within in 30 days of receipt of intimation if you agree to the demand raised.
5. Very importantly remember “Haste makes waste”. Don’t do things in a hurry. Plan well advance minimize the data entry mistakes.