With stricter checks and new rules for tax returns, more and more people in India are running into trouble with their Income Tax Returns (ITR). Many are getting notices about “defective returns” under Section 139(9) of the Income Tax Act. This can mean delays in getting your refund, possible penalties, or even your return being declared invalid if you don’t fix the problem quickly.
One common issue is with the ITR-1 form. In the past, if you had any capital gains (even if they were tax-free), you couldn’t use ITR-1. Now, you can use ITR-1 if your only capital gains are from stocks or equity mutual funds and the total is not more than Rs 1.25 lakh, and you have no carry-forward losses. But if your capital gains go over Rs 1.25 lakh, using ITR-1 is not allowed and your return will be considered invalid. The tax department usually catches this quickly and sends you a notice, giving you 15 days to fix the mistake.
What if you ignore the notice?
If you don’t respond or correct the error in time, the tax department will treat your return as if it was never filed. This can lead to penalties and long delays in getting any refund you’re owed.
How to fix a defective return in simple steps:
File a Revised Return:
If your original return hasn’t been processed yet, log in to the income tax portal, choose ‘Revised Return,’ and submit the correct form.
E-Verify Quickly:
After revising, make sure you e-verify your return within 30 days using Aadhaar OTP, net banking, or a digital signature. If you skip this, your return won’t count.
Rectify If Already Processed:
If the return has already been processed, you can still fix minor mistakes by requesting a rectification under Section 154 on the portal.
Meet All Deadlines:
You must submit revised or rectified returns before the end of the assessment year (March 31, 2026, for FY 2024-25) or before your original return is processed, whichever comes first.
Reply to Notices Promptly:
If you get a notice under Section 139(9), respond as soon as possible. You can also ask for more time online if you need it.
If you’re confused or your case is complicated (like if you have foreign income or different types of capital gains), it’s a good idea to talk to a tax expert or chartered accountant. Acting quickly and correctly can help you avoid legal trouble, penalties, and long waits for your refund.
