ITR wrongly filed for A.Y. 2018-19

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This query is : Resolved

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A client incorrectly filed their Income Tax Return (ITR-1) for Assessment Year 2018-19, declaring zero income despite having a gross total income of Rs. 15 lacs and TDS deducted of Rs. 1.50 lacs. The initial attempt to rectify the return via a rectification request failed due to a mismatch in gross total income. A potential solution involved filing a rectification request showing zero income but adjusting the TDS amount, hoping the Income Tax Department would then calculate the correct income based on Form 26AS. However, the advice received was to file a zero-income return initially, claim the TDS refund, and await a 'defective return' notice, after which a revised return with the correct income could be filed. In a surprising turn, the client received the full TDS refund without any notice or requirement to revise the return, leaving the tax professional seeking guidance on the next steps.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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31 July 2020 Dear Sir,

One of my client has wrongly filed his ITR-1 for AY 2018-19 showing everything as zero in his return filed.
The actual gross total income was Rs. 15 lacs on which 1.50 lacs tds was deducted.

Is there any way I can correct his return as there is refund of Rs. 1.37 lacs for that year.

While filing a rectification request, I was getting an error message that Gross Total Income (25 lacs) is not the same as filed in the original return (zero) filed.

Please help me in the above matter.

Regards,
Divyesh Jain

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 July 2020 Change of income not allowed under rectification of ITR.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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31 July 2020 If I file a rectification request and keep the income constant as shown in ITR return (which is zero) and change the TDS amount from zero to Rs. 1.50 lacs and claim the refund for the same.

Once he receives the rectification order, the income tax (cpc) may calculate income based on 26AS (25 lacs) and calculate his tax liability accordingly and issue less refund which is not a problem for him as the income will be calculated correctly by cpc in the rectification order.

Is this the way I can rectify his return. In original return, income will be zero but in rectification order income will show 25 lacs.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 July 2020 You will not receive rectification order but defective return notice for which you can file revised return with higher income.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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31 July 2020 Ok, That means once I must file a zero income return and claim tds.

Then after receiving a defective notice return as you say, will be able to file the correct return by revising it.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 July 2020 Yes...................

DIVYESH JAIN

DIVYESH JAIN (Querist)
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31 July 2020 Thanks a lot sir.. Will try this way and resolve the issue.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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18 August 2020 Dear Sir,

Today I got a phone call from my client for whom I have filed zero return and claimed the TDS credit.

My client got the entire TDS credit as refund as I have shown zero income.
He didn't get any defective return notice for not showing any income which was reflecting in his 26 AS.

What can be done now as still I haven't revise the return and claimed the entire TDS credit as refund.

Regards,
Divyesh Jain

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 August 2020 Pay the tax payable under self assessment, so that you can reply to the notice if any received and penalty can be avoided.
Normally no notice will be received.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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18 August 2020 Ok, I think it is a good solution. I will try this way. Thanks again.

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