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ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The Income Tax Department of India has released new validation rules for ITR forms 1, 2, and 4 for AY 2024-25. Read this blog to know how these validation rules are going to impact you as taxpayers.
The Income Tax Department (ITD) of India periodically updates the validation rules. It rolls out new income tax rules for different ITR forms to streamline the tax filing process and enhance transparency. The validation rules serve as guidelines that taxpayers must adhere to when filling out their ITR forms, ensuring that the information provided is accurate and complete.
ITR validation rules, or simply income tax rules, are essential to promote accuracy, enhance compliance, expedite processing, and ensure the integrity of the tax system. They benefit both taxpayers and tax authorities by reducing errors, detecting non-compliance, and maintaining the fairness of the tax collection process.
This blog will explore the validation rules specifically applicable to ITR forms 1, 2, and 4 for the AY 2024-25. Whether you are a respective taxpayer or a business entity, understanding these rules will help you navigate the tax filing process smoothly and avoid any potential errors or discrepancies.
ITR (Income Tax Return) validation rules refer to the set of regulations and requirements imposed by tax authorities to ensure the integrity of the information provided in tax returns. These rules are designed to verify the consistency and correctness of the data submitted by taxpayers while filing their income tax returns. The importance of ITR validation rules lies in their ability to:
By enforcing validation rules, tax authorities aim to reduce errors and inaccuracies in tax returns. These rules help identify potential mistakes, inconsistencies, or missing information. It allows taxpayers to correct any mistakes before submitting the returns, thereby ensuring that the information provided is as accurate as possible.
Validating tax returns ensures that taxpayers comply with tax laws and regulations. It helps detect deliberate misreporting or underreporting of income, which can be considered tax evasion. By implementing strict validation rules, tax authorities discourage non-compliance and encourage taxpayers to report their income truthfully.
Validation rules streamline the tax return processing system by automating the initial verification of data. By detecting errors or missing information early on, tax authorities can utilise their resources more effectively. It helps in lowering the need for manual intervention in routine cases and expedites the processing of returns.
Validation rules play a crucial role in maintaining the integrity and reliability of the tax system. They help prevent fraudulent activities, such as identity theft or the submission of false information. By cross-referencing the data provided in tax returns with other sources, tax authorities can identify discrepancies and take appropriate actions.
ITD has made available free return preparation software on its downloads page to ensure compliance with data quality requirements. However, there are also commercially available software or websites that offer return preparation services. To maintain the accuracy and compliance of income tax returns prepared through such commercially available software, the e-Filing portal employs various validation rules. These rules exist to ensure that the data uploaded is accurate and adheres to the specified validation criteria.
ITD has suggested taxpayers review these rules to make sure that the software they use complies with the requirements. This is important to prevent the rejection of returns due to poor data quality or errors in the return filing process.
As per the latest update, ITA has rolled out validation rules for FY 2023-24. These validation rules are for the e-filing of ITR forms 1, 2, and 4. They have a category of defect where each defect must be validated at the e-Filing/CPC end in ITR1 (or ITR2 or ITR4) according to the categories listed below:
Under category A of ITR1, “Uploading of Returns is not permitted. An error message will appear.” For example, if the “Name” of the taxpayer in ITR does not match the “Name” as per the PAN database, the returns will not be uploaded. Another example would be a taxpayer claiming the benefit of a senior citizen and a super senior citizen, but the DOB is not matching with the PAN database.
There are a total of 194 scenarios under category A for ITR1.
Similarly, under category D, “Return data can be uploaded, but the taxpayer who uploads the return will be warned that some deductions or claims might not be accepted unless the return is accompanied by the appropriate claim forms or details.” For example, Form 10EE should be filed to claim relief u/s 89A either under salary or under other sources.
There are two scenarios under category D for ITR1.
Similar to Form ITR1v, form ITR2 and ITR4 also have categories A and D defined similarly to Form 1 for them. There are different scenarios under categories A and D. These scenarios are different for each form and should be reviewed thoroughly before filing for ITR to avoid any mistakes.
Software providers are strongly advised by ITD to follow these rules to avoid causing inconvenience to taxpayers who use their software. It should be noted that these validation rules will be closely monitored and enforced by government authorities. Any breach of these regulations can lead to the blacklisting of the respective return preparation utility or software without prior notice. The blacklisting information will be published on the e-filing website.
No returns prepared using blacklisted software will be allowed to be uploaded until the software provider can provide details of the necessary corrections. This may cause unnecessary inconvenience for taxpayers and may negatively impact the reputation of software providers. The income tax department strictly mentions that it will not be held responsible for any such inconvenience or loss of reputation.
It is important for taxpayers and software providers to review and adhere to the validation rules issued by the ITD for the specific assessment year. Failure to meet these rules may result in the blacklisting of the software without prior notice. This can cause inconvenience to taxpayers and impact the reputation of software providers. Therefore, it is crucial to ensure compliance with the validation rules to avoid any potential consequences and maintain a smooth and efficient tax filing process.
Understanding and following the ITR validation rules not only contribute to individual and organizational compliance but also foster transparency, trust, and fairness in the tax system, ultimately benefiting both taxpayers and the Income Tax Department of India.
1. A Complete Guide for Filing ITR 3 Form
2.Income Tax Deductions for Disabled Persons Under Section 80U
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
