Rectification of Income Tax Return under Section 154

While filing Income Tax Return (ITR), taxpayers often make unintentional errors. These may be calculation mistakes, incorrect income details, or even a mismatch with the data in Form 26AS or AIS (Annual Information Statement). Fortunately, the Income Tax Act provides a remedy through Section 154, which allows for the rectification of mistakes apparent from the record. This section empowers both taxpayers and the Income Tax Department to correct genuine, clear errors in the return or the intimation received under Section 143(1).

What is Section 154 of the Income Tax Act?

Section 154 allows for the correction of mistakes that are apparent from the records. These errors must be clear, obvious, and not require long debates or complex interpretations to identify. This rectification can be initiated either by the Income Tax Department or by the taxpayer, provided the request falls within the time limit and conditions prescribed by law.

Rectification under Section 154 is not the same as revising an ITR under Section 139(5); it applies to already processed returns where the department has issued intimation or orders, and the taxpayer finds an error in that intimation.

Common Scenarios Where Rectification Can Be Filed

Rectification requests are typically filed in the following cases:

• Incorrect tax credit or mismatch in TDS
• Errors in interest calculation under Section 234A, 234B, or 234C
• Wrong adjustment of carry-forward losses
• Omission of deductions already claimed
• Clerical mistakes like wrong PAN, assessment year, or computation errors
• Mismatch between filed ITR and the department’s records (e.g., Form 26AS)

These mistakes must be evident from the return and supporting documents already submitted.

Who Can File a Rectification Request?

A rectification can be:

Initiated by the taxpayer, after receiving an intimation or order under:

Section 143(1): Intimation after return processing

Section 154: Previous rectification orders

Sections 200A or 206CB: TDS/TCS processing

Initiated by the Assessing Officer, if they discover an apparent mistake in any order passed by them.

Time Limit for Filing Rectification under Section 154

A rectification request must be made within four years from the end of the financial year in which the order or intimation sought to be rectified was passed. However, this period is only applicable to the taxpayer. The Income Tax Department can also make suo moto corrections within the same four-year time frame.

Process for Filing Rectification Online

Filing a rectification under Section 154 is a fully online process through the Income Tax e-Filing Portal. Here's how it’s done:

Login to the e-Filing Portal using your PAN/Aadhaar and password.

Go to the ‘Services’ menu and select ‘Rectification Request’.

Choose the Assessment Year and the relevant communication reference number (e.g., from intimation under Section 143(1)).

Select the type of request – whether it’s a request for reprocessing or correction of data.

Specify the mistake and supporting documents.

Submit the rectification request and e-verify it using OTP or DSC.

Once submitted, the request is reviewed by the CPC or Assessing Officer and processed within a few weeks.

Important Points to Remember

• You can file rectification only after the return is processed and you receive an intimation under Section 143(1).
• Rectification cannot be used to revise the return for new income or deductions. For that, you must file a revised return under Section 139(5).
• Ensure the mistake is obvious and verifiable from existing records—subjective or interpretative claims will be rejected.
• You can file a re-rectification request if you are not satisfied with the rectified order and still find an error.
• Use Form 26AS and AIS to match your records before requesting rectification

What Happens After Rectification Is Processed?

Once the department reviews your request, they may:

• Accept and issue a rectified intimation with updated details (e.g., revised refund or demand).
• Reject the request, with reasons mentioned in the communication.
• If accepted, you may receive an additional refund or see a correction in your tax payable amount.

You can track the status of the rectification from the e-Filing dashboard anytime.

Conclusion

Section 154 of the Income Tax Act is a taxpayer-friendly provision that helps correct small yet significant errors without the need for appeals or legal action. Whether it’s a TDS mismatch, wrong interest computation, or missed deduction, rectification ensures accurate processing of your ITR and smooth resolution of issues. Filing it timely and with proper supporting evidence can save you from unnecessary notices and help in receiving refunds promptly.