As taxpayers prepare to file their Income Tax Returns (ITRs) for the Assessment Year (AY) 2024-25, several common challenges and frequently asked questions have surfaced. These issues, ranging from tax regime selections to technical errors, have been addressed by the Income Tax department with a common FAQ circular.
One prevalent issue involves discrepancies between the name in the ITR and the PAN database. Taxpayers are reminded to verify and update their profile details to align precisely with the information registered under 'My Profile' to prevent validation issues during filing.
"Q: Taxpayer is getting error as 'Name of taxpayer in ITR does not match with the Name as per the PAN database?'
Answer: First Name, Middle Name, and Last Name in ITR should be the same as per the name registered under the 'My Profile' section after logging on to the portal. Taxpayers should update their profile and then download the latest prefill Json for filing returns in offline mode or start new filing in Online mode to resolve these issues," the department circular read.
Another significant change affecting taxpayers is the new default tax regime introduced from AY 2024-25. Under this regime, deductions under Schedule VIA, except for specific allowances like 80CCD(2)/80CCH/80JJAA, are not permissible unless taxpayers explicitly opt for the old tax regime. This adjustment necessitates careful selection during the filing process to ensure compliance with the chosen tax framework.
Technical glitches have also been reported, notably with bank account validations. Taxpayers are advised to update their bank account details in the income tax portal's 'My Profile' section before initiating the filing process. This ensures seamless processing of refunds and avoids delays caused by validation errors.
"Q: While filing the ITR, taxpayer is getting a bank account validation error. So, how to resolve the issue?
Answer: The taxpayer has to check whether valid bank account details are added under the 'My Bank Account' tab in the 'My Profile' section in the income tax portal before filing the ITR. Taxpayers should update their profile correctly before starting the new filing of returns. Taxpayers can file ITR using offline utility in case of facing any issues while validating the bank account. However, a pre-validated bank account is required for the issue of refunds," the circular explained.
Moreover, issues related to filing Form 10-IEA have emerged. This form is mandatory for taxpayers intending to file under the old tax regime with business or professional incomes (ITR-3 or ITR-4). Once filed for AY 2024-25, Form 10-IEA locks taxpayers into the old tax regime for the fiscal year, with limited options for revision.
Furthermore, taxpayers encountered greyed-out options for selecting ITR forms such as ITR-1 or ITR-4. This occurs when special income with Tax Deducted at Source (TDS), like winnings from lotteries under Section 115BB, makes these forms inapplicable. In such cases, taxpayers are required to opt for ITR-2 or ITR-3 instead, depending on their income structure.
"Q: In case taxpayer has earned special income like winning from lottery or horse races, then whether taxpayer is eligible to file ITR 1 and ITR 4?
Answer: In cases where TDS has been deducted from special income like winning from lottery or horse races, filing of ITR-1 and 4 is not allowed. So, it is recommended for taxpayers to check Form 26AS and AIS before filing the ITR," the circular read.
In light of these challenges, tax authorities emphasize the importance of timely verification of filed returns. Taxpayers must complete the verification process within 30 days of submission through Electronic Verification Code (EVC) or Digital Signature Certificate (DSC) to ensure compliance and avoid procedural complications.
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