Filed a wrong ITR? Here's how to rectify mistakes and avoid penalties

From missed income to wrong forms, ITR errors are common. Here's how revised returns, rectification, or updated filings can help you avoid penalties and refund delays

Filing your income tax return (ITR) correctly is crucial, but mistakes happen, even for careful taxpayers. Experts say that errors can range from minor oversights to serious mismatches, and knowing how to fix them promptly can save you from penalties and interest, or even prosecution.

Common mistakes to watch out for

Ritika Nayyar, partner at Singhania & Co., points out that “the most common mistakes taxpayers make include using the wrong ITR form, mismatched data with Form 26AS or Form 16, and failing to report all income sources, including minor interest from savings accounts. Procedural errors like not e-verifying the return or missing the filing deadline are also frequent.”

 

Mohit Mansharamani, senior associate at SKV Law Offices, adds that inadequate planning often leads to errors, such as providing incorrect bank details, choosing the wrong ITR form, or missing small income from freelance work or fixed deposits. CA Sonu Jain, chief risk and compliance officer, of 9Point Capital highlights that new-age incomes like trading in virtual digital assets (VDAs), foreign stocks, or F&O transactions are commonly overlooked, and mismatches with Form 26AS can trigger defective notices. 

 

How to do a course correction

Experts say there are two main mechanisms to correct mistakes:

 

Revised Return (Section 139(5)): Allows taxpayers to correct their errors, including unreported income or wrong deductions, before the end of the relevant assessment year. Multiple revisions are allowed within the deadline.

 

Rectification Request (Section 154): Used to fix obvious errors made by the IT Department, like TDS mismatches or arithmetic mistakes, after the return is processed. The department must respond within six months.

 

“If the revision deadline has lapsed,” explains Jain, “taxpayers can file an Updated Return under Section 139(8A) for up to four previous years, but this may attract penalties ranging from 25 per cent to 70 per cent of the tax due.”

 

The CBDT also provides step-by-step guidance on its e-filing portal, explaining how to initiate rectification, track status, and ensure compliance.

Consequences of ignoring mistakes

Failing to correct an ITR can be costly.

 

Ritika Nayyar warns that the return may be treated as defective, leading to penalties, interest on unpaid taxes, delayed refunds, or even scrutiny under Section 143(2). Mohit Mansharamani notes that late filing penalties under Section 234F can reach Rs 5,000, while deliberate non-compliance may attract prosecution under Section 276CC.

 

Jain shares a recent example. “In mid-2025, taxpayers who missed reporting VDA sales faced notices. Those who filed an Updated Return promptly avoided escalation, while others underwent scrutiny and reassessment proceedings.”