Income Tax

An Overview of Defective Return under Income Tax Act and its implications

A return shall be considered as a defective return unless it is accompanied by the following documents:

  1. A return in the prescribed form with all columns, annexure and statement duly filed in.
  2. A statement showing the computation of tax payable.
  3. Proof of tax, if any, claimed to have been deducted or collected at source and the advance tax and the self-assessment tax, if any, claimed to have been paid.
  4. Report of audit U/s 44AB or where the report has been furnished prior to the furnishing of the return, a copy of such report together with the proof of furnishing of the report.
  5. Finance act, 2013 provides that a return shall be considered as defective unless tax together with interest, if any, payable in accordance with section 140a, has been paid on or before the date of furnishing of the return of income.
  6. Where the accounts of the assessee have been audited, then the copies of the audited profit and loss account, balance sheet, and the auditor’s report.
  7. In the event that normal books of records are kept up by the assessee, then copies of:
  • Manufacturing Account, Trading Account, Profit and Loss Account or the Income and Expense Account and the Balance Sheet.
  • In a case of a firm, the personal accounts of the partners.
  • If it’s a case of AOP/BOI, the individual records of the AOP/BOI.
  • If it’s a case of a partner, his individual record in the firm.
  • In the case of a proprietary concern, the individual records of the proprietor.
A defective return of Income Tax is considered as good as not having been filed
A defective return of Income Tax is considered as good as not having been filed

Rectifying the defective return so filed:

In the event that the assessee does not amend the inadequate return within the time of 15 days or the extended days then it should be regarded as void or defective. Hence it will be deemed that the assessee has not filed the return.

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Where the assessee rectifies the defect after the expiry of the period of the 15 days but before completion of the assessment, the A.O. may condone the delay and accept the return as a valid return.

If the A.O. finds that the return furnished by the assessee is defective or void, he may offer the assessee an opportunity to correct the defect within a time of 15 days from the date of such intimation. The A.O. on a request via an application by the assessee may extend this time limit.

Wondering how to correct rectify the error in the return filed?

No need to worry about, there is a provision in the Income Tax Act that provides you an opportunity to rectify or  correct the error or any mistakes by filing a revised return under section 139 (5) of the Income Tax Act. But the most vital condition is one should keep in mind is that the original income tax return must be filed within the due date specified u/s 139(1).

Read here- How to rectify the defective return of income tax


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