File an Amended Income Tax Return to Exclude Political Donations

Filing an updated return under Section 139(8A) can be a bit complex, especially when it involves excluding previously claimed deductions like political donations. Firstly, it's essential to understand that Section 139(8A) allows taxpayers to file an updated return within 24 months from the end of the relevant assessment year.¹ This means your client can still file an updated return for FY 2021-22. However, there's a catch. According to the Income Tax Act, an updated return cannot be filed if it results in a decrease in tax liability or an increase in refund.² In your client's case, removing the political donation would decrease their tax liability, which means they might not be eligible to file an updated return under Section 139(8A). If your client still wants to rectify their return, they may need to explore other options, such as filing a revised return under Section 139(5) or seeking relief under Section 154 for rectification of mistakes. To proceed, I recommend consulting with a tax professional or chartered accountant to determine the best course of action for your client's specific situation. They can help navigate the complexities of the Income Tax Act and ensure compliance with the relevant provisions.

Virag, 

What is the exact issue you have here? 

Thanks for all the replies.

While I exclude political donation amount, the tax liability would be increased.

My issue is that when I remove the political donation amount, my tax liability would be increased with interest but now, it doesn't happen that way.

One of our clients received a refund of Rs. 75,000 for the FY 2021-22 by claiming a political donation. At the time, the refund was granted solely due to this claim. Now, the client wishes to withdraw the political donation claim, but his current tax liability is only Rs. 10,000. Instead of repaying the full refund when he received at that time by claiming a political donation.

Hope I have clarified the issue.

Virag Shah.

this happens because the Income-tax return form does not have any provision for showing the effect of refund already granted.

I think there are two options for you:

1. Pay the additional tax return now (equivalent to the refund already received) along with the balance tax liability. I am not sure if this works for ITR-U or not; or
2. file the return with Rs 10000 liability. As and when the return will be processed, additional demand will be raised by the department to account for the refunded tax.

Thank You, Nikhil sir for your notable reply.

Is there any other way, we can file the revised return and pay our tax liability accordingly or do we have to go with this updated return tool for section 139 (8A)?

Please suggest.

Thank you in advance.

Virag Shah.

the reason you are filing 139(8A) return is because the deadline for revising returns for the relevant AY have already expired! right!

Yes.

There is no other option for now.