The income tax (I-T) department has introduced a crucial functionality on its website allowing taxpayers to discard their previously filed but unverified Income Tax Returns (ITR). Earlier, taxpayers were allowed to revise the ITR only in case of error or omission.
“The income tax portal has introduced a new feature that enables users to ‘Discard ITR’ for unverified original, belated, or revised ITRs starting from the assessment year 2023-24. It is a good move by the income tax department as it will increase the scope for taxpayers for revision of their income tax return, which was earlier limited to omission and error. However, so far there is no provision in law for discarding the ITR hence going forward its legal validity can be questioned,” said Tarun Kumar Madaan, Tax Head at Coherent Advisors.
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The discard option can be used repeatedly, provided the ITR status remains as unverified or pending verification. The facility is only available for the AY24 onwards for the respective ITR till the specified time limit for filing ITR under section 139(1)/139(4) /139(5). Once an ITR is discarded, it cannot be reinstated. The action is irreversible, and therefore it is essentially disclaiming that the ITR was not filed at all.
To locate the ‘Discard’ option, follow the website pathway: www.incometax.gov.in → Login → e-File → Income Tax Return → e-Verify ITR → “Discard.”
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The FAQs released by the income tax department states, “User can avail the option of “Discard” for the ITRs being filed u/s 139(1) /139(4) / 139(5) if they do not want to verify it. User is provided a facility to file an ITR afresh after discarding the previous unverified ITR. However, if the “ITR filed u/s 139(1)” is Discarded and the subsequent return is filed after the due date u/s 139(1), it would attract implications of belated return like 234F etc., Thus, it is advised to check whether the due date for filing the return u/s 139(1) is available or not before discarding any previously filed return.”
It is not compulsory to file a subsequent ITR if you have discarded your previously unverified ITR. However, given that the taxpayer has uploaded the return data earlier, it is generally anticipated that they would file another ITR subsequently. Moreover, if you have dispatched your ITR V to CPC and it is intransit, but you realize that the details were not reported correctly, you are explicitly advised not to discard such returns.
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The new ‘Discard’ facility allows taxpayers to manage their ITR filings more efficiently and helps rectify any inaccuracies or omissions within the specified windows. But it’s essential to use it with caution as once discarded, an ITR can’t be restored.
