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Your Income Tax Has Been Selected Under Risk Management Process

05.09.2019 
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  3. Your Income Tax Has Been Selected Under Risk Management Process In Project Management
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You must file your tax return with utmost care to avoid any errors or omissions. But if a mistake does creep in, you still have an opportunity to rectify it.

Your Income Tax Has Been Selected Under Risk Management Process Pdf

Jan 30, 2017, 05.31 PM IST

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Your income tax has been selected under risk management process ppt
Taxpayers are usually careful and exercise due diligence while filing income tax (I-T) returns. But sometimes in a rush to file their tax returns within the due date of 31st July (extended to 05th August this year), they end up making mistakes. Some of the common mistakes while filing the (I-T) returns are unclaimed deductions or an income not reported or reported incorrectly. One's contact details or the bank account given for the refund of taxes could also be wrong. However, if you have filed your return within the due date, then you need not worry as you can revise your return.
A major reason why taxpayers have to revise their returns is that they are not aware of the recent changes in tax rules, which result in incorrect filing of returns. For example, according to the latest tax laws, 'this year the taxpayer whose income exceeds Rs 50 lakh per annum had to file a declaration about his/her assets and liabilities. However, only a few taxpayers might have reported this due to their ignorance. In such cases, they still have an opportunity to rectify their mistake by filing a revised return,' says Vaibhav Sankla, Director, H&R Block India.
Who can file revised returns?
Of the many advantages of submitting your I-T returns timely, the most important is that it can be revised. Only those IT returns may be revised which have been filed within the due date. However, 'to make your revision process smooth, it's better not to verify a return - if that has been filed online -- you wish to revise. That is because once a return is verified, the Income Tax Department begins processing it. Therefore, correct your errors when you notice them, review your return properly and submit your revised return. You can then verify the revised return,' informs Archit Gupta, founder and CEO, cleartax.com.
So if you notice any error in your tax return after filing it, you better file a revised return correcting the error to avoid any penalty. Income tax laws allow the taxpayers an opportunity to correct the error or omission in their returns by submitting a revised tax return under Section 139(5).
'The provision clearly states that any person who has filed the original tax return on or before the due date can file a revised tax return before the expiry of one year from the end of the relevant assessment year, or before the completion of assessment, whichever is earlier. For example, if a person has filed his original return for the financial year 2015-16 within the due date, then he can file a revised return before March 31, 2018 or before the completion of the assessment of the particular financial year, whichever is earlier,' says Nitin Baijal, Director, BMR & Associates LLP.
One good news is that starting the next AY 2017-18, the Income Tax Department has allowed revision of belated returns (returns which are filed after the due date) as well.
How many times can you revise your return?
Let's consider an example to understand this. If you have filed your tax return for FY 2015-16 on or before 5th August, 2016, then you can file a revised return any number of times up to 31st March 2018. 'Though one can revise one's tax return any number of times, but the facility should be used sparingly as it may increase the chances of your return being selected for scrutiny, especially if it is resulting in large refunds for you. Revision is allowed only if the omission was unintentional, but if you deliberately file a false return, then you will be liable to be imprisoned under Section 277 and the offence will not be condoned by filing a revised return. Further, you may also have to pay 100 to 300 per cent of tax due as penalty for concealing income,' says Sankla.
According to him, in case the revision of original return results in some taxes payable, you may have to pay the interest under Sections 234C & 234B (levied for non-payment of advance taxes), but you will be saved from the interest under Section 234A (levied for non-filing of tax return within due date). You can pay such interest and taxes through Challan No. 280. Also make sure that you enter the details of such challan in the revised return, else it will be considered a defective return owing to additional tax payable.
How to file a revised return?
For filing the revised return, you will be required to enter the acknowledgement number and the date of filing of the original return in the revised form. If you are filing a revised return more than once, then at first and every subsequent revision you will have to enter the acknowledgement number and the date of filing relating to the original return only. You can file a revised return online or through physical mode.
You can revise a return online only if you have filed the original one online and have the 15-digit acknowledgement number of the original return sent to you by the I-T Department. 'Your return can be revised with any of the e-filers, irrespective of whether you filed your original return with them or not. Incorporate the omission in your return, then review and check all the fields, including those where there was no change. If the changes result in a tax due, you must pay this tax before submitting your return,' says Gupta.
Verifying your returns
A revised return filed online must be verified. You can verify it via several methods provided by the IT department including netbanking or Aadhaar OTP (One-time Password). You can also send the physical ITR-V to CPC, Bangalore. However, remember to send the ITR-V of the revised return. ITR-V is sent as an attachment by the I-T Department to your registered email ID after you successfully upload/file your return online.
It is always in your best interest to file your original I-T return with utmost care, avoiding the chances of any error or omission. You can, however, still use the opportunity provided by law to rectify mistakes in your return, if any, before it is too late.

It can further lead to penalty or prosecution as well. So, if you are filing a revised tax return, here’s a look at which of the changes can attract scrutiny.

Revising a return

Once you file an income tax return, you are allowed to file a revised return under section 139(5) of the Income-tax Act, 1961. You can do this provided you have filed the original return on or before the due date, which is usually 31 July of the assessment year (AY). The window to file a revised return is open up to one year from end of the relevant AY or before the assessment of return by the tax department, whichever is earlier.

Typically, the department sends you an intimation regarding assessment of your return. So, if you have filed the return for AY 2016-17 on or before 5 August (which was the extended deadline), you can revise the tax return till 31 March 2018, or before the assessment happens, whichever is earlier.

Similarly, you can still revise your return for AY 2015-16 if it was filed before the due date (7 September) till 31 March 2017, provided assessment is still pending.

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“If a person who has filed a tax return discovers any omission or wrong statement therein, he may revise his tax return,' said Homi Mistry, partner, Deloitte Haskins & Sells LLP.

“The use of the word ‘omission’ or ‘wrong statement’ makes it clear that such revision is permitted only if the error is ‘unintentional’ or ‘under bona fide belief earlier of such statement being correct’. Intentional concealment or false statement would not be covered the within scope of revision,' said Shailesh Kumar, director-direct taxation, Nangia & Co.

In the revised tax return, changes can be made to any information or statement provided in the original return, such as income or expenditure details, details of assets or liabilities in balance sheet, personal information, bank account details, residential status, and others.

However, you will have to also file a proper explanation to support such revisions with the tax authorities, explained Kumar.

Your Income Tax Has Been Selected Under Risk Management Process Examples

What can lead to scrutiny?

It may be that some taxpayers are misusing the option to revise previous tax returns after demonetisation by manipulating the figures of income, cash-in-hand, and profits to accommodate the current year’s undisclosed income.

If you disclose additional cash- in-hand in the revised return, you may attract the income tax department’s attention.

“Any changes to opening or closing balance of cash, increase in cash sales, reduction in cash expenditure, reporting of any loan or any other cash transaction (including gifts), not reported in the original return may lead to scrutiny by tax authorities,' said Kumar.

Should you file it?

The department’s notice is a warning to those who are planning to manipulate the revision option to adjust for unaccounted money. Those who have genuine reasons, need not worry. While any case related to revised return “is expected to be seen with suspicion by tax authorities, taxpayers need not worry if the changes are well explained,' Kumar added.

If you have sufficient documents to support the revision, you can go ahead and file a revised return. “If a scrutiny notice is received, the assessee should duly comply with the notice and respond to all the questions asked by the assessing officer in a timely and accurate manner,' said Mistry.

You should also explain the reasons for revising the return, along with supporting documents evidencing the necessity for the revision. For instance, if interest income was offered for tax on the basis of Form 26AS downloaded at the time of filing of the return but the Form 26AS downloaded at a later date reflects a higher amount of income and tax deducted at source (TDS), it would be a valid reason to revise the tax return and the tax payer could submit copies of both the forms to the tax officer in support of the revision, explained Mistry.

Similarly, if you have made a donation under section 80G but missed to claim it in the original return, you can claim it by filing a revised tax return and get the refund accordingly. Make sure you have relevant receipts of such donations.

Things to know

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A tax return can be revised any number of times, as long as conditions mentioned earlier are fulfilled. But the mode of filing the revised return should not be different from the mode used to file the original return. That means, if the original return was filed electronically, the revised return too has to be filed electronically. Similarly, if the original return was filed physically, the revised return should also be filed physically.

The process, and the forms, for a revised return are similar to those for filing of the original return.

However, while filing a revised return, don’t forget to tick the space that specifies that this is a revised return.

Also mention the acknowledgement number of the original return . Once a revised return is filed, the original or the previous return is deemed to be withdrawn.