Defective Returns Under Section 139(9): Common ITR Filing Mistakes and How to Avoid Notices

Bhavika Rajput
2 days ago
7 min read

Filing your Income Tax Return (ITR) correctly is an essential task for every taxpayer, but even the most careful filer can run into issues. One of the common challenges is receiving a notice under Section 139(9) of the Income Tax Act, which addresses defective returns. A defective return refers to a filing that contains errors or omissions that prevent the Income Tax Department from processing it. These issues can include anything from incorrect forms to missing documents or mismatched financial data. When such mistakes occur, taxpayers can face delays in their refunds, penalties, or even have their tax filings declared invalid. Understanding the common mistakes that lead to defective returns and how to prevent them is key to ensuring that your ITR is processed smoothly without encountering these issues.

What is a Defective Return Under Section 139(9)?
Common ITR Filing Mistakes Leading to Defective Returns
How to Avoid Notices Under Section 139(9)
How TaxBuddy Helps You Avoid Defective Returns
Conclusion
FAQs

What is a Defective Return Under Section 139(9)?

Under Section 139(9), a return is considered defective if it fails to comply with the necessary requirements for proper processing by the Income Tax Department. This could mean that the return is incomplete, incorrect, or lacks required information, making it impossible for the department to process it effectively. Common defects include the wrong ITR form being selected, missing or incorrect reporting of income, discrepancies between the filed ITR and the details in Form 26AS or Annual Information Statement (AIS), or missing mandatory disclosures like bank account details or supporting documents. If a taxpayer receives an income tax notice for a defective return, they are given a limited window of time to correct the errors and resubmit their return. Failure to do so results in the return being treated as invalid, which can lead to penalties, loss of tax benefits, and even legal consequences. Therefore, rectifying these errors as soon as possible is crucial to avoid further complications.

Common ITR Filing Mistakes Leading to Defective Returns

Filing your ITR accurately is crucial to avoid notices under Section 139(9). Here are some of the most common mistakes that lead to defective returns:

Choosing the Wrong ITR Form

One of the most frequent errors is selecting the wrong ITR form. The Income Tax Department provides different forms based on the source of income and the type of taxpayer. For example, ITR-1 is for individuals with income under Rs. 50 lakh and no capital gains. On the other hand, ITR-2 or higher forms are needed if you have capital gains or multiple income sources. Selecting the wrong form can cause your return to be rejected or considered defective. Therefore, it’s important to refer to the guidelines or seek expert help to select the right form for your specific financial situation.

Not Reporting All Income Sources

Another common mistake is not reporting all sources of income. Even if you think small amounts of income like bank interest, fixed deposits, rental income, or dividends are negligible, they must be declared in your ITR. Omitting these income sources could result in notices for concealment of income, and in the worst case, penalties or prosecution. It’s essential to disclose all forms of income, no matter how minor, to avoid any issues later on.

Mismatch Between ITR and Form 26AS/AIS

Form 26AS and AIS are key documents that reflect the tax deducted at source (TDS) and other financial transactions linked to your PAN. Discrepancies between the data in your ITR and these forms are often flagged by the Income Tax Department, leading to a defective return notice. Cross-checking the figures in your ITR with the details in these forms before submission is critical to ensure that they align correctly.

Missing or Incorrect Bank Account Details

Incorrect or missing bank account details can also result in defective returns. If your bank account information, such as the account number, IFSC code, or account type, is incorrect, it can delay your refund or even lead to a notice from the department. Always double-check your bank account information before submitting your ITR, and ensure that it matches the details registered with the Income Tax Department.

Late Filing or Missing Deadlines

While missing the deadline doesn’t directly result in a defective return, it can lead to penalties and missed opportunities, such as the inability to carry forward losses or claim certain deductions. Filing on time is crucial to avoid these complications. If you miss the deadline, you may have to file a belated return, which comes with its own set of rules and penalties. It’s always best to file your ITR before the due date to avoid these issues.

How to Avoid Notices Under Section 139(9)

To avoid receiving notices under Section 139(9), it’s important to be thorough when filing your return. Here are some steps to ensure your return is not defective:

Choose the Correct ITR Form: Select the appropriate form based on your income sources and category. Double-check the guidelines or use expert help to make sure you are using the right form.
Report All Income Sources: Ensure that you report all sources of income, even minor ones like bank interest, dividends, and other earnings.
Cross-Check Form 26AS and AIS: Before filing, compare the data in your ITR with the details in Form 26AS and AIS to ensure there are no discrepancies.
Verify Bank Account Details: Make sure that your bank account details are accurate to prevent delays or errors in processing your refund.
File On Time: Always file your return before the due date to avoid penalties and ensure that you are eligible for all available deductions.
Consider Expert Help for Error-Free Filing: If you’re unsure about any aspect of your tax filing, consider using expert assistance to ensure that your return is filed accurately.

How TaxBuddy Helps You Avoid Defective Returns

TaxBuddy is a trusted platform that can help taxpayers avoid common mistakes leading to defective returns. Here’s how TaxBuddy can assist you:

Expert Review: TaxBuddy’s team of professionals ensures that your ITR is filed correctly, with the right form selected and all incomes reported accurately.
AI-Powered Tax Planning: The app leverages AI to suggest deductions and exemptions based on your financial data, helping you minimize mistakes.
Notice Resolution: If you receive a defective return notice, TaxBuddy offers free expert assistance to help you respond and rectify the defects promptly.
Real-Time Refund Tracking: TaxBuddy allows you to track your refund status, keeping you updated on the progress of your return.
User-Friendly Mobile App: The TaxBuddy mobile app simplifies the ITR filing process with features like pre-filled forms, document uploads, and expert support at your fingertips.

Conclusion

Defective returns under Section 139(9) often arise from common mistakes like incorrect personal details, mismatched income declarations, or filing with the wrong ITR form. Such errors can lead to notices from the Income Tax Department, requiring timely correction to avoid penalties or further scrutiny. Being vigilant during the filing process, by double-checking data accuracy, reconciling TDS details, and using the correct forms, can help taxpayers avoid defective return notices. Leveraging reliable tax filing solutions ensures smoother compliance and reduces the risk of errors that trigger Section 139(9) notices.

Frequently Asked Question (FAQs)

Q1. What happens if I don’t respond to a Section 139(9) notice?

Failure to rectify a defective return within the specified time frame will result in the return being considered invalid. This could lead to penalties, the forfeiture of tax benefits, or even legal consequences.

Q2. Can I revise my return after receiving a defective return notice?

Yes, you can file a revised return to correct the defects mentioned in the notice. However, it must be filed within the deadline indicated in the notice to avoid further complications.

Q3. How can I verify if I have chosen the correct ITR form?

To verify whether you have chosen the correct ITR form, you can refer to the Income Tax Department's official guidelines or use platforms like TaxBuddy, which help select the right form based on your income details and filing requirements.

Q4. Is it mandatory to report interest income from savings accounts?

Yes, interest income from savings accounts is taxable and must be reported in your ITR. However, deductions under Section 80TTA (for individuals) or Section 80TTB (for senior citizens) may apply to reduce the taxable income.

Q5. How does TaxBuddy assist in avoiding ITR filing mistakes?

TaxBuddy offers expert assistance to ensure your return is filed accurately. The platform provides a review by tax professionals, AI-powered suggestions for tax-saving opportunities, real-time refund tracking, and free notice resolution, minimizing the chances of mistakes.

Q6. Can I file ITR after the due date?

Yes, you can file a belated return if you miss the due date. However, there are penalties and certain restrictions, such as the inability to carry forward losses or claim some deductions. Filing on time helps you avoid these issues.

Q7. How can I check the status of my tax refund?

TaxBuddy allows you to track the status of your refund in real-time, ensuring you stay informed throughout the process. The app provides updates on the refund status directly on your mobile device.

Q8. What documents are required to file ITR?

Common documents required to file ITR include Form 16 (if you're employed), Form 26AS, proof of income (e.g., bank interest, dividends), supporting documents for deductions, and your bank account details.

Q9. Is it necessary to link my PAN with Aadhaar?

Yes, linking your PAN with Aadhaar is mandatory for ITR filing and other financial services. It ensures your tax filing is processed efficiently and helps avoid discrepancies.

Q10. How do I correct errors after filing my ITR?

If you discover errors after filing your ITR, you can submit a revised return. The revised return allows you to correct the mistakes and resubmit the accurate information within the specified time frame.

Q11. How do I know if I have declared all my incomes?

Review all possible sources of income, including interest from savings accounts, fixed deposits, rental income, dividends, and any capital gains. Ensure that all of these are declared in your ITR.

Q12. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?

TaxBuddy offers both self-filing and expert-assisted plans, allowing you to choose the option that suits your preferences. Whether you're filing on your own or seeking professional help, TaxBuddy provides support for both.