A 2-Minute Delay That Cost ₹25,000: How One Missed E-Verification Changed Entire Tax Regime!
When we think of “late filing,” most of us imagine missing the due date by a few days or weeks. But what if you filed your Income Tax Return on time — yet lost all your deductions just because you verified it a few days late?
Sounds absurd? That’s exactly what happened in a recent appeal decision from the Income Tax Department — and it’s a wake-up call for every salaried taxpayer who prefers the Old Tax Regime.
The Case That Shocked Many
An individual taxpayer (a salaried woman) filed her return for Assessment Year 2024–25 on 25 July 2024, claiming around ₹2.9 lakh worth of deductions under HRA, LIC, PPF, and other sections.
Everything was perfect — except one tiny detail: She e-verified the return on 28 August 2024, nearly a month later.
That single delay — just the e-verification — triggered a chain reaction:
1. The Centralized Processing Centre (CPC) in Bengaluru treated her return as belated, based on a 2022 CBDT Notification.
2. The system automatically applied the default new tax regime (Section 115BAC(1A)).
3. All her exemptions and deductions vanished.
4. She got a tax demand of about ₹19,000.
When she sought rectification under Section 154, CPC refused, saying no “apparent mistake” existed. She appealed — and lost again.
What the Tax Authority Said
In the appeal, the taxpayer argued passionately:
“I uploaded the return before the due date. How can a late verification take away my right to choose the old regime?”
But the Commissioner (Appeals) held otherwise:
- From AY 2024–25, the new tax regime is the default option.
- To opt out, one must file (and verify) the return on or before the due date.
- As per CBDT’s Notification No. 05/2022, if verification is done after 30 days, the date of verification becomes the date of filing.
Hence, her “return date” was deemed 28 August 2024, not July — and her option to opt-out of the new regime was invalid.
Result:
“All deductions disallowed. Order confirmed. Appeal dismissed.”
Why This Is a Bombshell
This judgment exposes a silent trap in the post-2024 system.
Many taxpayers believe they’re safe once they “submit” the ITR — but the system doesn’t consider it filed until it’s verified.
Even a single day’s delay in e-verification can:
- Convert an on-time return into a belated return.
- Cancel all deductions under Sections 80C, 80D, and HRA.
- Force you into the new regime without your consent.
- Lead to an unexpected tax bill and loss of refund.
Imagine losing ₹25,000 of your hard-earned money — not for missing the due date, but for clicking “verify” a few days late.
What the Law Says
Section 115BAC(6) is crystal clear:
- The option to opt out of the new regime must be exercised on or before the due date under Section 139(1).
- For non-business taxpayers, this choice is made in the return itself.
But the system logic (via Notification No. 05/2022) adds a digital twist — the “date of filing” = “date of verification” if done late. So, in the eyes of law, your return “exists” only when you verify it.
Practical Lessons from This Case
1. Upload ≠ File. The ITR is valid only when it’s verified. Uploading alone means nothing.
2. Verify within 30 days, or before the due date — whichever comes first.
3. Watch your email/SMS — CPC reminders aren’t just spam; missing them can cost money.
4. Rectification under Section 154 won’t save you. It applies only to clear, factual mistakes — not to legal disputes like tax regime choice.
5. Condonation requests under Section 119(2)(b) may help, but they’re time-consuming and not guaranteed.
The Bigger Question
Should a technical delay — when taxes are honestly filed — lead to such a harsh consequence?
Many experts say “No”, arguing that procedural lapses shouldn’t override substantive compliance.
But until the CBDT or the Courts intervene, this automated logic remains binding. The income tax system is becoming more rule-driven than ever — and every click now counts.
Final Takeaway
The moral is simple:
“Don’t just file your ITR — verify it before you sleep that night!”
Because in the world of digital tax filing, timing isn’t just money — it’s your entire tax regime.
*****
About the Authors:
Hanchate Rama Prasada Rao is a finance and taxation professional with practical experience in handling direct tax appeal matters before the Commissioner of Income Tax (Appeals) [CIT(A)].
Rachamadugu Nitheesh Kumar is a CA Final student with hands-on exposure to income-tax representation and appellate procedures. The authors regularly write on subjects relating to income-tax interpretation, appeals, and corporate law.
They can be reached at lifelonglearners777@gmail.com.
Author Bio
