Income Tax Department Unveils ‘Discard ITR’ Feature: A Comprehensive Guide

In a significant development, the Income Tax Department has rolled out a new feature on its website, allowing taxpayers to discard their previously filed but unverified Income Tax Returns (ITR). Termed ‘Discard ITR,’ this functionality provides users with the option to discard original, belated, or revised ITRs, expanding the scope for revisions beyond mere errors or omissions.

Amit Gupta, Managing Director of SAG Infotech, highlighted the empowerment this feature brings to users but cautioned that, despite its advantages, there is currently no legal provision for discarding an ITR. This raises questions about the legal validity of the feature in the future.

The tax department has released a set of frequently asked questions (FAQs) to address common queries related to the ‘Discard ITR’ option. Here’s a comprehensive overview of key points to consider:

1. Choosing the ‘Discard’ Feature: Taxpayers can opt for the ‘Discard’ feature for ITRs filed under sections 139(1), 139(4), and 139(5) if they choose not to verify it.
2. Implications of Discarding: Discarding an ITR filed under section 139(1) and subsequently filing a return after the due date may result in consequences like belated return penalties (e.g., 234F).
3. Accessing the ‘Discard’ Option: Users can access the ‘Discard’ option on the income tax website by following the pathway: www.incometax.gov.in → Login → e-File → Income Tax Return → e-Verify ITR → ‘Discard.’
4. Eligibility: The ‘Discard’ option is available only when the ITR status is either ‘unverified’ or ‘Pending for verification.’
5. Multiple Uses: Users can repeatedly utilize the ‘Discard’ option as long as the ITR status remains unverified or pending verification.
6. AY24 Onward: This feature is accessible starting Assessment Year 2024. Once an ITR is discarded, it cannot be reinstated.
7. Time Limit: The ‘Discard’ option is available only until the specified time limit for filing ITR under sections 139(1)/139(4)/139(5) (currently until December 31 of the respective Assessment Year).
8. Irreversibility: Once an ITR is discarded, it becomes irreversible, disclaiming the filing of the ITR with no possibility of reinstatement.

In the backdrop of this development, the Central Board of Direct Taxes (CBDT) has reported a record number of over 7.85 crore Income Tax Returns filed until October 31 this year. The official release notes that October 31 was the due date for filing ITRs (excluding ITR-7) for taxpayers without international or specified domestic transactions.