Guide to Responding to Demand Notices and Filing Revised Income Tax Returns for AY 2024-25

Effective tax compliance extends beyond the mere filing of income tax returns (ITR). After filing, taxpayers may encounter demand notices issued by the Income Tax Department or may identify errors in their originally filed returns. Addressing such situations promptly and accurately is critical to ensuring compliance, avoiding penalties, and maintaining financial integrity.

This guide outlines the process for responding to demand notices and revising income tax returns for Assessment Year (AY) 2024-25, with the final deadline for revisions being 31st December 2024.

Responding to a Demand Notice

A demand notice is issued when discrepancies are identified between the taxes declared in the return and those paid. Responding efficiently requires a structured approach.

Step-by-Step Process

1. Access the Notice

   • Log in to the Income Tax e-filing portal using your credentials.
   • Navigate to Dashboard > Pending Actions > Response to Outstanding Demand to view details of the demand notice.

2. Choose the Appropriate Response

   • If the Demand is Correct:
     • If unpaid, select ‘Demand is correct’, proceed to payment, and retain the acknowledgment.
     • If already paid, select ‘Demand is correct’, provide payment details (e.g., challan number, BSR code), and upload a copy of the payment proof.
   • If You Disagree with the Demand:
     • Select ‘Disagree with the Demand’, provide valid reasons for disagreement (e.g., incorrect tax credit adjustments), and upload supporting evidence.

3. Submit and Monitor

   • Submit your response online and ensure all attached documents are accurate and complete.
   • Track the status under Services > Response to Outstanding Demand for updates.

Filing Rectification Requests: Revised Process

The Income Tax Department has revised its rectification filing process to enhance clarity and efficiency. Rectification requests are now categorized as:

1. Rectification of Order Passed by CPC
2. Rectification of Order Passed by CIT(A)
3. Request to AO Seeking Rectification

For rectifications related to CPC orders:

• Select Income Tax or Equalisation Levy.
• Enter the Assessment Year.
• Specify the nature of the request—Revised Return or Rectification—and provide the acknowledgment number of the original return.

Rectifications are limited to non-material errors, such as statistical inaccuracies, typographical errors, or other discrepancies that do not affect taxable income or tax liabilities.

Filing a Revised ITR for AY 2024-25

Section 139(5) of the Income Tax Act permits the filing of a revised ITR if material errors are identified in the original filing. This includes corrections to taxable income, tax liabilities, or any other key details. The final date for filing a revised return for AY 2024-25 is 31st December 2024.

Steps to File a Revised Return

1. Access the Portal

   • Log in to the Income Tax e-filing portal and choose ‘File Income Tax Return’.
   • Select ‘Revised Return’ as the return type.

2. Update the Return

   • Make necessary corrections to the original return. Ensure accuracy in all fields and provide the acknowledgment number of the original return for reference.

3. Submit and Verify

   • File the revised return and verify it using Aadhaar OTP, EVC, or by sending the signed ITR-V to CPC Bangalore.

Conclusion

Timely action is paramount when responding to demand notices or filing revised returns. Promptly addressing discrepancies ensures compliance, minimizes penalties, and safeguards financial integrity.

The 31st December 2024 deadline for AY 2024-25 revisions offers taxpayers an opportunity to rectify errors, whether statistical or material, in their original filings. Engage with the process proactively, and consider professional advice for complex cases to ensure error-free compliance. By doing so, you can uphold the accuracy and credibility of your financial records while avoiding unnecessary complications.