-
Jul 14, 2025
-
ITR Filing 2025: Filed the wrong ITR form? You could lose your refund and face…
With stricter validation checks and evolving tax return formats, a growing number of taxpayers across India are facing issues related to incorrect or incomplete Income Tax Return (ITR) filings. The consequence? A spike in ‘defective return’ notices under Section 139(9) of the Income Tax Act, leading to refund delays, penalties, and in some cases, returns being declared invalid.
In earlier years, any capital gains—whether taxable or exempt—made you ineligible to file ITR-1. Under the updated rules, you can now file ITR-1 if your only capital gains are modest (up to ?1.25 lakh) from stocks or equity mutual funds and you have no carry-forward losses. However, if your capital gains exceed ?1.25 lakh, filing ITR-1 will make your return invalid.
Such cases are promptly flagged by the tax department and a notice is issued, typically granting the taxpayer 15 days to rectify the error.
What Happens If You Don’t Act?
Failure to respond or correct the errors within the given timeframe can result in the return being treated as not filed at all. This can not only invite penalties but also cause indefinite delays in processing refunds.
|