ITR-5, 6, 7 get Excel utilities to cut errors as Sept 15 deadline nears

With the September 15 deadline nearing, experts say Excel tools cut errors, simplify compliance, and help businesses, companies and trusts avoid costly tax disputes.

With the September 15 deadline for filing income tax return (ITR) nearing, the Income Tax Department has rolled out Excel utilities for filing updated returns in ITR-5, ITR-6, and ITR-7 for assessment years (AY) 2021-22 and 2022-23. Tax experts say this move will ease compliance for businesses, companies, and trusts, while also reducing filing errors.

 

Why do Excel utilities matter?

 

According to Niyati Shah, chartered accountant & vertical head of personal tax at 1 Finance, these Excel utilities make compliance significantly easier by “auto-validating data, flagging inconsistencies, reducing dependency on manual calculations, and integrating seamlessly with financial statements.”

 

 

Earlier, many firms depended on third-party software or risked manual errors. Vishwanathan Iyer, senior associate professor at Great Lakes Institute of Management, Chennai, said the new tools change the dynamic:

 

·  A mismatch in depreciation figures or capital accounts is flagged instantly.

 

·  CSR expenses, dividend distribution, and business profit schedules in ITR-6 now auto-link to reduce inconsistencies.

 

·  Trusts using ITR-7 are prompted to fill mandatory disclosures like application of income.

 

“This levels the playing field for small firms by lowering compliance costs and reducing the chances of notices,” Iyer added. 

 

Common mistakes taxpayers make

 

Despite these tools, mistakes continue. Shah pointed out that businesses often misreport income, fail to reconcile GST data, or overlook schedule-specific disclosures, all of which can trigger penalties.

 

Iyer noted that “most errors stem from mismatched schedules” such as misreporting CSR expenses or trusts forgetting to file Schedule ER. Errors in TDS/TCS credits also persist, which can be avoided by reconciling with Form 26AS or AIS.

 

Updated returns: A second chance

 

The option to file updated returns under Section 139(8A) provides a window of 48 months to correct earlier mistakes. Rajesh Ranjan Thakur, assistant professor, Alliance School of Business, said, “This provision reduces the fear of fines and legal troubles by allowing taxpayers to rectify errors and disclose undisclosed income.”

 

However, he cautioned that this facility comes at a cost: an additional tax of 25 to 75 per cent may apply when filing ITR-U.

 

Shah shared a case where a private limited company used this option to disclose unreported consultancy income from FY 2022-23. By filing an updated ITR-6, it avoided penalties of over Rs 12 lakh and maintained clean compliance. 

 

Experts agree that when used carefully, updated returns and Excel utilities transform compliance from a burden into a strategic opportunity. As Shah summed up, “This facility helps businesses maintain dispute-free records and build long-term financial credibility.”