Return Treated as Defective? What Should Taxpayers Do?
Once the taxpayers submit and e-verify an Income Tax Return (ITR), the CPC of the Income Tax Department starts processing these filed ITRs. During this processing, the department assesses your ITR and calculates your tax liability or refund, if applicable. Once the ITR is processed, the Income Tax Department issues an intimation notice under Section 143(1), informing the taxpayer that their ITR has been processed. However, sometimes, your ITR is marked as “Defective”. Let us know why this happens.
When the income tax department finds any defects in your ITR, it marks the return as defective under section 139(9) of the Income Tax Act, 1961. This means that your return has some errors, such as mismatches or incomplete information. But there is no need to panic, you will get an opportunity to correct the error and file an updated return.
Reasons for Defect ITR
Here are the key reasons why your ITR is marked as defective:
- Non-submission of Required Details such as PAN
- Reporting wrong income
- Opting for the incorrect ITR Form for filing
- Discrepancies between the data of Form 26AS and Form 16.
- Incomplete documents.
- Incorrect reporting of presumptive taxation.
What to Do When Your ITR is Marked Defective?
If your ITR has been marked as defective by the income tax department, they send you a notice allowing you to make changes within 15 days. The time limit can be extended if the taxpayer requests it. If you do not take necessary action to make changes, your ITR will be considered Invalid, as if you never filed it. Therefore, correct your mistakes as soon as possible to avoid income tax notices, penalties and further delay.
How to Rectify Mistakes in Defective Return
Here is a step-by-step guide on how to correct your mistakes and file an updated return:
- Step 1: Go to the Income Tax Department’s e-filing portal and log in using your user ID and password.
- Step 2: Go to your defective notice and read all the details.
- Step 3: Identify the mentioned mistakes.
- Step 4: Submit an updated return carefully with the correct information. You can also consult a tax expert to guide you.
- Step 5: Upload all the required documents and verify your updated return using Aadhaar OTP, a digital signature, or an electronic verification code.
