After filling an Income Tax Return, the department verifies the same by going through the information given by the assessee in his return of income. If any anomaly appears from the record, notice of demand is issued by the department addressed to the assessee. The assessee has to comply with the said notice. He has to either make payment according to the demand, or apply for rectification of the same.
Why Rectification is required?
There are certain reasons why an assessee needs to apply for rectification under Section 154 of the Income Tax Act. It is either the salary entered is higher as what has been entered is the amount of income exempted from the gross salary of an assessee. Again not mentioning the interest paid for a house property of the assessee can be a reason. Moreover other mistakes include wrong entries of the BSR code, TAN number, etc. Sometimes an assessee enters a wrong challan number along with date of deposit.
Which mistakes can be rectified?
To rectify an error apparent from record, the department can amend either orders passed by it under the Income Tax Act or any intimation under section 143(1) of the Act. Mistakes which can be rectified are mainly arithmetical or clerical mistake, mistake in calculating the written down values etc.
Who is the authority to rectify under section 154?
Rectification is made either by an Income Tax authority or by Commissioner of Income Tax (Appeals), on their own or by any application made by the assessee before them.
Is notice to an assessee required before a rectification?
Any change in the tax liability of the assessee cannot be done without issuing a notice to him. The assessee has to be given an opportunity of being heard before passing the order. The order of s rectification should be in writing.
Can an online application for rectification be made?
The facility for making online application for rectification is available only in case of electronic filing. If there is any mistake in the return of the assessee, the return submitted has to be rectified. Rectification will be processed at Centralized Processing Centre. If it appears acceptable, then rectification order is issued.
While filling up the form, all the required fields are to be filled with correct information. All the schedules, like tax payment and TDS should be filled properly. The tax return will be reviewed fully.
What is the time limit of making an application for rectification?
The order for rectification should be passed within 6 months from when the application is made, but the time limit can be extended as per law.
Is a subsequent rectification possible?
If the original assessment is rectified, a second application for rectification is allowed. There is no limit of the number of times of rectification.