Discard ITR: Made a mistake in your ITR? Can you discard it and file a fresh tax return?

The deadline for submitting your income tax return is set to conclude today, and there has been no communication from the tax authorities regarding a possible extension beyond the July 31st, 2024 deadline. Individuals who wait until the last minute to file their returns are more likely to make errors or provide inaccurate information. Therefore, it is crucial for taxpayers to be aware of the ‘Discard ITR’ option.

In an effort to simplify the tax filing process and provide greater flexibility to taxpayers, the Income Tax Department has introduced a new feature called the ‘Discard ITR’ facility. This option allows taxpayers to discard their original tax returns and file fresh ones, giving them the opportunity to correct errors or make necessary changes.

Let’s understand about this option and learn how does it help taxpayers.

What is the ‘Discard ITR’ Option?

The ‘Discard ITR’ option allows taxpayers to eliminate their original tax returns and submit new ones. This feature is especially beneficial for individuals who may have erred in their initial submissions, providing a simple method to correct these mistakes or make necessary adjustments. By offering this flexibility, the Income Tax Department seeks to improve the ease and precision of the tax filing process.

Also Read: Income Tax Return filing: When are Senior and Super Senior Citizens obligated to file ITR?

This option was started from Assessment Year 2023-24 onwards. The discard ITR feature applies to all types of returns – original, revised or belated. While it offers increased flexibility, its use is limited to unverified returns, which may reduce its practicality.

Benefits of the ‘Discard ITR’ Facility

1. Error Correction: One of the primary benefits of the “Discard ITR” facility is the ability to correct mistakes in the original tax return. This can include errors in income declaration, deductions claimed, or any other inaccuracies.

2. Enhanced Accuracy: By allowing taxpayers to file fresh returns, the facility ensures that tax filings are accurate and up to date, reducing the risk of discrepancies and potential audits.

3. Increased Flexibility: The facility offers significant flexibility, enabling taxpayers to make necessary changes without the fear of penalties or repercussions for the initial mistakes.

4. Simplified Process: The introduction of this feature simplifies the overall tax filing process, making it easier for taxpayers to comply with tax regulations and avoid issues with their filings.

Adhil Shetty, CEO, Bankbazaar.com, says, “The ‘Discard ITR’ facility is an addition to the tax filing process, offering taxpayers a valuable opportunity to correct errors and ensure their tax returns are accurate. While it comes with certain limitations, the benefits of enhanced accuracy, increased flexibility, and a simplified process make it a useful tool for many taxpayers.”

You can avail the option of ‘Discard ITRs’ if you do not want to verify it. Taxpayers is given a facility to file an ITR afresh after discarding the previous unverified ITR. However, if the ITR filed is discarded and the subsequent return is filed after the due date, it would attract implications of belated return. Thus, it is advisable to check whether the due date for filing the return is available or not before discarding any previously-filed return. If an ITR is discarded once, it can’t be reversed. It is important to be vigilant while availing the discarding option. If an ITR is discarded, it means that such an ITR is not filed at all.

Taxpayers can make use of this option only if the ITR status is unverified/pending for verification. There is no restriction on availing this option multiple times. It is a prerequisite that the ITR status remains unverified or pending verification.

It is important to remember that the discard option is unavailable if the ITR verification is in transit. This occurs when the taxpayer has chosen physical verification by sending the ITR-V to the CPC and the ITR-V has been sent but not yet processed by the CPC.

Taxpayers must remember that discarding an ITR does not exempt the taxpayer from the obligation to file a new return. The income tax FAQs stress that after discarding an unverified return, a subsequent ITR must be filed.