The accurate and complete filling up of the relevant column or detail in the Income Tax Return (ITR) form is most crucial for correct calculation of income by the Income Tax Department. As a general principle during processing, in case of any inconsistency between the values as entered in the Schedules and the cross-referenced values in other Schedules or Totals / Summary in PART B-TI,
- for Incomes, the higher value may be taken and
- for Expenses, Losses or Deductions, the lower value may be taken
for final computation of Income. In case of e-returns using Department software these inconsistencies will not arise. However, if you are using other commercially available software for return preparation, please contact the software provider in case of such inconsistencies.
In case the computation of Income or refund is different than what had been entered or what is expected, please verify the accuracy of the data entered by you in the ITR. Except for limited number of complicated tax returns, for most taxpayers, the simple check points are the following:
Salary from all employers, irrespective of whether Form 16 has been issued or not, should be entered in Item 1 of ITR 1 or details in Schedule Salary in ITR 2.
Interest income from fixed deposits, savings bank account etc should be entered in Item 2b of ITR 1 or Item 1b of Schedule OS-Income from Other Sources in ITR 2. The total in Item 2c of ITR 1 and intermediate totals in Items 1e, 1g, and 3 of Schedule OS-Income from Other Sources in ITR 2 should be correctly entered.
House Property Income should be entered in Item 1a, Municipal taxes paid should be entered in Item 1c and the intermediate total should be entered in Item 1e of Schedule HP-Income from House Property in ITR 2.
Income from Short Term Capital Gains should be entered in Item A of Schedule CG-Capital Gains in ITR 2.
Income from Long Term Capital Gains should be entered in Item B of Schedule CG-Capital Gains in ITR 2.
Adjustment of current year and brought forward losses- Schedules CYLA, BFLA and CFL-
Most taxpayers have left these Schedules completely blank. These schedules are used for permissible adjustment of current year loss of one type of income against another type of income and is available only in ITR 2.
Income chargeable to Income tax at special rates- Schedule SI
Most mistakes have occurred in this Schedule since taxpayers have not correctly filled the codes, rates or values. The following points may be considered:
Deductions from Income under Chapter VIA
Most mistakes have occurred due to incomplete details or leaving blank of value of deduction claim in ITR 1 or in the Schedule VIA in ITR 2. In most cases only the total deduction value is mentioned.
Reasons for difference in calculation of Tax or Interest under 234A, B or C and Interest on Refund.
Reasons for mistakes in Credit for tax payments or TDS
A major reason for difference in refund amount during processing is that the details of tax payment or TDS do not match the data available with the Department.
Miscellaneous mistakes
Mistakes in address etc do not affect processing but cause mis-delivery or non-delivery of communication or in case of Bank Account error cause rejection of refund credit to taxpayer account.
How to rectify the mistake and to get the correct refund
Mistakes in the ITR due to any of the reasons may be corrected by submitting a rectification form.
For faster credit of Income Tax refunds, correct bank account number and MICR code in the return should be mentioned. In case of any mistake in MICR or Bank Account number, the refund will not be credited. and a cancelled cheque showing correct particulars would be required to be submitted to CPC for correction in bank account number or MICR code.
In case the computation of Income or refund is different than what had been entered or what is expected, please verify the accuracy of the data entered by you in the ITR. Except for limited number of complicated tax returns, for most taxpayers, the simple check points are the following:
Salary from all employers, irrespective of whether Form 16 has been issued or not, should be entered in Item 1 of ITR 1 or details in Schedule Salary in ITR 2.
Interest income from fixed deposits, savings bank account etc should be entered in Item 2b of ITR 1 or Item 1b of Schedule OS-Income from Other Sources in ITR 2. The total in Item 2c of ITR 1 and intermediate totals in Items 1e, 1g, and 3 of Schedule OS-Income from Other Sources in ITR 2 should be correctly entered.
House Property Income should be entered in Item 1a, Municipal taxes paid should be entered in Item 1c and the intermediate total should be entered in Item 1e of Schedule HP-Income from House Property in ITR 2.
Income from Short Term Capital Gains should be entered in Item A of Schedule CG-Capital Gains in ITR 2.
Income from Long Term Capital Gains should be entered in Item B of Schedule CG-Capital Gains in ITR 2.
Adjustment of current year and brought forward losses- Schedules CYLA, BFLA and CFL-
Most taxpayers have left these Schedules completely blank. These schedules are used for permissible adjustment of current year loss of one type of income against another type of income and is available only in ITR 2.
Income chargeable to Income tax at special rates- Schedule SI
Most mistakes have occurred in this Schedule since taxpayers have not correctly filled the codes, rates or values. The following points may be considered:
Deductions from Income under Chapter VIA
Most mistakes have occurred due to incomplete details or leaving blank of value of deduction claim in ITR 1 or in the Schedule VIA in ITR 2. In most cases only the total deduction value is mentioned.
Reasons for difference in calculation of Tax or Interest under 234A, B or C and Interest on Refund.
Reasons for mistakes in Credit for tax payments or TDS
A major reason for difference in refund amount during processing is that the details of tax payment or TDS do not match the data available with the Department.
Miscellaneous mistakes
Mistakes in address etc do not affect processing but cause mis-delivery or non-delivery of communication or in case of Bank Account error cause rejection of refund credit to taxpayer account.
How to rectify the mistake and to get the correct refund
Mistakes in the ITR due to any of the reasons may be corrected by submitting a rectification form.
For faster credit of Income Tax refunds, correct bank account number and MICR code in the return should be mentioned. In case of any mistake in MICR or Bank Account number, the refund will not be credited. and a cancelled cheque showing correct particulars would be required to be submitted to CPC for correction in bank account number or MICR code.
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