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Business Standard
26-06-2025
- Business
- Business Standard
Unlimited but repeated ITR revisions may cause scrutiny, say experts
Revising income tax returns (ITR) multiple times by taxpayers in case of an error or discrepancy may invite scrutiny. Experts warn that careless or excessive revisions might not go unnoticed by the tax department's AI-driven systems. No cap on revisions, but a clear deadline There is no limit to the number of times an ITR can be revised under the Income Tax Act. As long as you're within the time frame, December 31 of the relevant assessment year, or before the assessment is completed, whichever is earlier, one can file multiple revisions. 'Section 139(5) does not limit how many times a return can be revised,' explains Shefali Mundra, chartered accountant and tax expert at ClearTax. 'But each revision must happen within the deadline, else it becomes invalid.' Niyati Shah, chartered accountant and vertical head of personal tax at 1 Finance, adds, 'Each revised return supersedes the last. So accuracy becomes extremely important, because your final filed version is what matters.' Frequent changes could raise red flags While the law allows multiple revisions, experts caution against overuse, especially when the revisions lead to significant changes in reported income, deductions, or tax paid. 'The Income Tax Department uses AI-based anomaly detection,' says Kumarmanglam Vijay, partner and head of practice, direct tax at JSA Advocates & Solicitors. 'Multiple revisions without valid reasons could delay refunds or trigger scrutiny under CASS.' Sujit Bangar, founder of adds a caveat: 'If revisions are due to minor issues and don't impact your tax calculations, the number of revisions isn't a concern. But material changes must be justifiable and documented.' Can you revise after receiving a notice? It depends on the type of notice. · Section 143(1) (intimation): A revised return can still be filed, as long as the time limit hasn't lapsed. · Section 143(2) (scrutiny notice): Opinions vary. -Mundra says, 'Yes, but only before the assessment is completed.' -Shah adds: 'After 143(2), the door for revision closes and explanations must be provided during the scrutiny.' -Vijay, referencing judicial precedent, notes that a revised return is possible if the assessment isn't completed and the statutory deadline hasn't expired. When should you actually revise? Revising your return makes sense if: · You forgot to report income (interest, rent, capital gains) · You used the wrong ITR form · You missed claiming deductions (like 80C or HRA) · There's a mismatch in TDS or Form 26AS data However, it's not advisable to revise for minor spelling errors or cosmetic details. 'For such cases, it's better to file a rectification under Section 154,' says Mundra. Updated return option (Section 139-8A) Taxpayers also have the option to file an updated return within 48 months from the end of the assessment year under Section 139(8A), introduced in the Finance Act, 2022. 'This is useful if you missed filing a return entirely or need to declare additional income later,' says Vijay. 'But remember, it comes with a cost, an additional 25–50 per cent tax over and above your dues.' Bottom Line: Revise only if there's a genuine error that affects your tax liability. Keep documentation ready, and don't treat the revision window as a casual edit tool. The tax department may be watching
News18
12-06-2025
- Business
- News18
RBI's Repo Rate Cut: What It Means For Your Fixed Deposit Returns And Tax Outgo
Last Updated: Banks have started cutting FD rates, reducing returns for retirees and conservative investors who rely on them The Reserve Bank of India's recent decision to reduce the repo rate by 50 basis points to 5.50% has created a ripple effect across the financial ecosystem. While the move is aimed at reviving economic momentum amid easing inflation, it carries notable implications for both borrowers and savers, particularly in terms of taxation on interest income. What This Means for Borrowers Home loan holders and other borrowers on floating interest rates will be among the immediate beneficiaries. A lower repo rate typically leads to reduced lending rates, meaning lower EMIs. For instance, a Rs 50 lakh home loan with a tenure of 20 years may see EMIs drop by approximately Rs 1,500 per month, offering relief to households juggling multiple expenses. With a cumulative deduction of 100 basis points in the repo rate in 2025, banks have been steadily decreasing the fixed deposit interest rates. According to SBI research fixed deposit rates have declined by 30 to 70 basis points since February 2025. Short and medium term fixed deposits are likely to witness the most serious rate cuts. For example, a 1 year fixed deposit rate dropping from 7% to 6.5% would result in Rs 5,000 less annual interest on a Rs 10 lakh deposit. So, the situation is less favourable for fixed deposit (FD) investors. Banks have already begun lowering FD interest rates, which means that savers, especially retirees and conservative investors who depend on FDs, may earn less on their investments, according to CA Shefali Mundra of ClearTax. 'A 6% FD for someone in the 30% tax bracket effectively yields just 4.2%—barely ahead of inflation. With rate cuts, this post-tax return may drop further," says Mundra. While the repo rate cut itself doesn't alter tax laws, its effect on interest income is undeniable. As deposit rates fall, so do the absolute interest earnings, which in turn reduces the tax liability in numerical terms. However, the relative tax burden increases, as a larger portion of the now-reduced interest income goes towards taxes. Smart Strategies for FD Investors in a Falling Interest Rate Scenario As interest rates continue to decline, fixed deposit (FD) investors may need to rethink their approach to safeguard returns. Here are some strategies to consider: 1. Ladder Your FDs: Spread your investments across FDs with different maturities. This helps manage reinvestment risk and ensures liquidity at regular intervals. 2. Explore Government-Backed Savings Schemes: Consider alternatives like the Senior Citizen Savings Scheme (SCSS) or National Savings Certificates (NSC), which often offer better returns and are less influenced by repo rate changes. 3. Look into Short-Term Corporate Bonds: Top-rated corporate bonds with 2–3 year tenures may offer higher yields than traditional FDs, with relatively manageable risk. 4. Evaluate Hybrid Mutual Funds: Hybrid funds, which invest in a mix of debt and equity, can provide better returns than FDs while keeping risk moderate. 5. Keep an Eye on Inflation: With CPI inflation estimated at 3.7% for FY26, real returns from FDs may be negligible. Diversifying into equity mutual funds could help preserve purchasing power over the long term. 'The key is diversification and tax efficiency. Investors must weigh not just returns, but also the post-tax impact," adds CA Mundra. tags : Fixed deposit Location : New Delhi, India, India First Published: June 12, 2025, 08:03 IST News business » tax RBI's Repo Rate Cut: What It Means For Your Fixed Deposit Returns And Tax Outgo
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Business Standard
13-05-2025
- Business
- Business Standard
ITR 2025: Which form to use, what documents you need, and how to save tax
The tax season is here, and with it comes the annual ritual of preparing to file your Income Tax Return (ITR). For millions of taxpayers across the country—whether salaried employees, freelancers, business owners, or investors—filing your return accurately and on time is both a legal obligation and an opportunity to optimize your finances. If you want to file your income tax return smoothly, avoid errors, and potentially save on taxes, here are some essential tips by Shefali Mundra , Tax expert at Clear Tax Choose the right tax regime Taxpayers can choose between the old and new tax regimes. The old regime allows various deductions and exemptions, whereas the new regime offers lower tax rates with limited exemptions. Evaluate which regime benefits you more based on your income and eligible deductions. Many salaried individuals with high deductions (like 80C, HRA, and home loan interest) may benefit from the old regime, while those with simpler finances may find the new regime more attractive. Pick the Right ITR Form Choosing the correct ITR form is crucial. Filing the wrong one could result in your return being treated as defective. ITR-1: Income up to ₹50L from salary, one house property, and other sources. ITR-2: For those with capital gains, multiple properties, or foreign income. ITR-3: Income from business or profession. ITR-4: Presumptive income scheme for small businesses or professionals. Gather Key Documents in Advance Organize all relevant documents before you begin: Form 16 from your employer Form 26AS and Annual Information Statement (AIS) Bank interest certificates, rent receipts, capital gains statements Investment proofs (PPF, ELSS, insurance, etc.) PAN and Aadhaar Don't Miss Out on Deductions Maximize your tax savings by claiming deductions under: Section 80C (up to ₹1.5L): PPF, EPF, ELSS, principal on home loan Section 80D: Health insurance premiums Section 24(b): Interest on housing loans HRA, LTA, and other exemptions if you qualify Ensure that all claims are backed by valid documentation. Check Your Tax Credit Details Before filing, cross-verify the TDS reflected in Form 26AS and AIS against your actual income. Any mismatches must be clarified with the deductor to avoid refund delays or scrutiny. How to decide between old and new regime? If you claim deductions like Section 80C (PPF, ELSS), HRA, home loan interest, etc., the Old Regime may save you more. If you have a simple income structure with minimal deductions, the New Regime may be more beneficial due to lower slab rates.
India Today
12-05-2025
- Business
- India Today
ITR filing 2025: 6 Must-know tips for before you file your tax return
It's that time of year again, when we gather all our income details and prepare to file our income tax return (ITR). Whether you're a salaried employee, a freelancer, or a small business owner, filing your return properly and on time is Mundra, Tax Expert at ClearTax, said that staying informed, no matter the source of your income, can help you make the most of the deductions, steer clear of penalties, and even increase your to help you avoid last-minute stress or mistakes, here are six key things you should know before you WHICH ITR FORM TO USE Choosing the correct ITR form is important. Filing the wrong one may lead to rejection of your Income Tax Department has different forms for different types of taxpayers. For example, if you earn only from salary or pension, you'll likely need ITR-1. ITR-2 applies If your salary is over Rs 50 lakhs, or you have capital gains, more than one house property, or foreign income, if you have higher income, capital gains, or foreign income. On the other hand, if you have income from a business or profession, you may need ITR-3 or it is advisable to always double-check before AADHAAR WITH PANadvertisementBefore you even think about filing your tax return, make sure your Aadhaar is linked to your PAN. Shefali Mundra mentioned, 'It's mandatory to link your Aadhaar number with your PAN to file ITR. Failure to do so can lead to an inoperative PAN and complications in the filing process.'KEEP ALL DOCUMENTS READYBefore you start filing, gather all the important documents. "Be sure to have your Form 16, Form 26AS, and the Annual Information Statement (AIS)," said Shefali account statements and interest income certificates are also important. To claim deductions, keep investment-related proofs under 80C or 80D ready, she BETWEEN OLD AND NEW TAX REGIMEThere are two tax systems to pick from. 'Taxpayers can choose between the old and new tax regimes. The old regime allows various deductions and exemptions, whereas the new regime offers lower tax rates with limited exemptions and deductions. Evaluate which regime benefits you more based on your income and eligible deductions,' stated if you have business or professional income and wish to continue with the old regime, you'll need to submit Form 10-IEA before filing your ALL INCOME, EVEN SMALL ONESWhile most people remember to report their salary, it's equally essential to mention other types of income too. This includes bank interest, rent from properties, freelance payments, and even small investment profits. Reporting everything helps avoid notices from the tax department YOUR RETURN AFTER FILINGadvertisementFiling your return online is just one half of the process. The other half is submitting the ITR, you must confirm your identity, either digitally using Aadhaar OTP, internet banking, or other options, or by sending a printed and signed ITR-V form to the Centralised Processing Centre (CPC), Income Tax in Bengaluru. If this step is missed, your return will not be processed by the tax stated, 'Filing your Income Tax Return doesn't have to be overwhelming—especially when you're well-prepared.' Starting early, understanding the right tax regime, selecting the appropriate ITR form, organising your documents, and double-checking details not only helps you stay compliant but also helps you make the most of your tax-saving Reel
