What does the newly introduced 'Discard Income Tax Return' feature entail? Advantages for taxpayers!

The Income Tax Department has introduced a new feature named 'Discard Return' to simplify the income tax return filing process. This option allows taxpayers to discard their filed returns instead of opting for a revision in case of errors. 

However, there is a condition you can only use the 'Discard' ITR option if you have not verified your income tax return for the assessment year 2023-24.

What is Discard ITR?

The “Discard” ITR option on the Income Tax Department's website allows taxpayers to permanently delete their filed tax returns. Once discarded, the return can not be retrieved by the taxpayer. 

The process is simple: You just need to log in to the Income Tax website (www.incometax.gov.in), then go to the e-filing option, select Income Tax Return, and then e-verify ITR. 

Here, you will find the option to discard your return. This feature is applicable to returns filed on or after April 1, 2023, for the FY 2022-23 (AY 2023-24). 

The discard option can only be used if the return is not verified (either through e-verification or by sending it to the CPC). Even if the ITR verification is in transit to the CPC, the discard option can not be exercised. 

Tax experts view this as a beneficial move, especially for those who discover errors after filing their returns. They can now discard the unverified return and submit a fresh one, eliminating the need for the cumbersome process of first e-verifying and then revising the return.

Some Frequently Asked Questions About The Discarded IT Returns-

1. Can I discard my unverified ITR for AY 2023-24?

Yes, you can discard your ITR filed under sections 139(1), 139(4), or 139(5) if it is not verified. This allows you to file a fresh ITR after discarding the previous unverified one. Be cautious, though, as discarding an "ITR filed u/s 139(1)" and filing a return after the due date might lead to penalties.

2. Can I retrieve an ITR that was discarded by mistake?

In case an ITR is discarded, then it is not possible to reverse it. Exercise caution when choosing the discard option, as it implies the return has not been filed at all.

3. Where can I find the “Discard” option on the ITR website?

You can find the “Discard” option by following this path: www.incometax.gov.in → Login → e-File → Income Tax Return → e-Verify ITR → “Discard”

4. If I discard my unverified ITR, do I need to file a new one?

Yes, if you discard an unverified return, you are expected to file a subsequent ITR later. This aligns with your responsibility to file your income return based on your earlier activity.

5. Can I discard my return if the ITR-V has not reached CPC yet?

You should not discard returns for which the ITR-V has already been dispatched to CPC. An undertaking affirming this decision is required before discarding the return.

6. Can the “Discard” option be used more than once?

Yes, you can use the Discard ITR option multiple times, provided the "ITR status" remains "Unverified" or "Pending for verification.

7. Can I use the Discard ITR option for a previous assessment year (AY 2022-23)?

No, the Discard ITR option is available only from Assessment Year 2023-24 onwards for the corresponding ITR. This choice is accessible until the specified time limit for filing the ITR under sections 139(1), 139(4), or 139(5), currently set as the 31st of December of the respective Assessment Year.

Also Read: Tax Deadline Reminder: File Your Updated Return for Assessment Year 2021-2022

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