From the assessment year 2023–2024, taxpayers will be able to 'Discard ITR' for unverified original, belated, or revised ITRs. The income tax department made a wise decision by expanding the opportunity for taxpayers to correct their income tax returns, which was previously limited to omissions and errors. However, since there is now no law allowing for the ITR to be discarded, its validity may be raised into doubt. Let's understand about Discard ITR - Eligibility, Process, and Consequences
With the new 'Discard' feature, taxpayers can handle their ITR submissions more effectively and make any necessary corrections within the given time periods. However, you must use it carefully since once an ITR is discarded, it cannot be restored.
Eligibility for Discard ITR Option
- The discard option can be used multiple times, provided the ITR status filed under 139(1), 139(4), or 139(5) remains unverified or pending verification.
- The option is only available for the ITR for the assessment year 2023–24 onwards until the due date for filing ITRs under sections 139(1), 139(4), and 139(5) expires.
Process to Discard ITR
- An ITR cannot be restored once it has been discarded. Since the action taken cannot be reversed, it is essentially to confirm that the ITR was not filed.
- The below online path will bring you to the 'Discard' option:
Income tax --> Login --> e-File --> Income Tax Return --> e-Verify ITR --> e-Discard.
Filing Subsequent ITR after using the Discard option
- If you have discarded your previously unverified ITR, you are not required to file a subsequent ITR. It is commonly expected that the taxpayer will file a subsequent ITR if he has uploaded the return data earlier.
- You are specifically advised not to discard such returns if you have sent your ITR V to CPC and it is in transit, but you later discover that the information was provided incorrectly.
- You can choose 139(4) when filing a subsequent ITR if the ITR filed under Section 139(1) was discarded after the due date.
Consequences of Discarding the ITR
- ITR can be discarded before the due date u/s. 139(1) to avoid late filing implications.
- A discarded ITR is regarded as an ITR that has not been filed at all.
- The option to discard the unverified ITR is available until the due date u/s. 139(1), 139(4), and 139(5).
Conclusion
After fixing mistakes in their original filing, taxpayers can submit a new ITR using the discard option. Taxpayers must be aware of deadlines and the consequences of submitting, though. The facility should only be used carefully during the specified times.
Frequently Asked Question (FAQs)
1. During a financial year, how many times may I discard a return?
If your return is marked as "unverified" or "pending verification," you may discard it as many times as you like.
2. My ITRV was sent to CPC, but it hasn't arrived yet; it's currently in transit. Can I use the "Discard" option still?
The signed acknowledgement that you sent to CPC is regarded as verification of return. For this reason, once you have sent the signed acknowledgement to CPC, it is advised that do not discard the return.
3. A fresh return was filed after the deadline, but the original ITR filed under Section 139(1) before the due date was discarded. Will there be a late filing penalty under Section 234F?
Yes. A penalty for a delayed return under Section 234F would apply.
4. Although I filed my original ITR under Section 139(1) before the due date, it hasn't been verified yet. Can I use the discard option?
Yes. A return filed under Sections 139(1), 139(4), or 139(5) that hasn't been verified yet can be discarded.
5. Can I use discard option for my unverified return filed for AY 2021–2022 and 2022–2023?
No. Returns can be discarded starting in FY 2022–2023 (AY 2023–2024). Therefore, any return filed for a year earlier than FY 2022–2023 cannot be discarded.
6. If I "Discarded" my previously, unverified ITR, do I still need to file a subsequent ITR?
It will be presumed that you were required to file the return if you originally filed it and have subsequently discarded it. Therefore, it is best to file a fresh return if you have already filed your original ITR and have discarded it ; otherwise, you may receive a non-filing notice.
7. Let's say I filed a fresh return after discarding my original ITR. What information is required to be submitted if I want to file a revised return later?
Once discarded, a return is considered not filed. Thus, the original filed return will not be taken into account.
For instance, say you filed a original return on 01/07/2023 and discarded the same on 21/07/2023. After that you filed a fresh return on 27/07/2023. Now you will have to provide details of the “Original filing date” and “Acknowledgement number” of the ITR filed on 27/01/2023 for filing the revise ITR.
8. What factors need to be taken before discarding the return?
It is advisable to verify the original return and file a revised return in order to avoid penalties under section 234F. First, find out whether the deadline for filing the return under section 139(1) is available. If the deadline is over but you still have time to e-verify the original return (30 days not expired since the date of filing), then do so.
For instance, let's say you submitted your return on 29/07/2023 and you are thinking about discarding it on 10/08/2023. Here, you will be liable to a penalty under Section 234F if you file a fresh return and discard the previously filed one. Therefore, it is advised to e-verify the original return and then file the revise return
