Rectification of Mistakes: Section 154

Published 19 October 2026

A TDS credit missed in processing, a deduction disallowed by a computing error, interest charged on the wrong figure: these are the commonest grievances against an intimation or order, and most of them need neither an appeal nor a revised return. Section 154 allows “any mistake apparent from the record” to be corrected by the authority that made it. The reader’s difficulty is knowing what counts as such a mistake, which route on the portal to use, and how long the authority has.

Which Act governs which years

Under section 536(2)© of the Income-tax Act, 2025, rectification is among the proceedings that continue under the Income-tax Act, 1961 “in respect of any tax year beginning before the 1st April, 2026”. So:

intimations and orders for assessment year 2026-27 and earlier are rectified under section 154 of the 1961 Act;
those for tax year 2026-27 onwards are rectified under section 287 of the 2025 Act.

Point	1961 Act	2025 Act
What may be amended	s.154(1)(a) to (d): orders; intimations under ss.143(1), 200A(1), 206CB(1)	s.287(1)(a) to ©: orders; intimations under ss.270(1) and 399
Matters decided in appeal or revision excluded	s.154(1A)	s.287(2)
On its own motion, or on application	s.154(2)	s.287(3)
Notice before enhancing	s.154(3)	s.287(4)
Four-year limit	s.154(7)	s.287(8)
Six months to decide an application	s.154(8)	s.287(9)

What a “mistake apparent from the record” is

The phrase has been read narrowly since T.S. Balaram, ITO v. Volkart Brothers (1971), decided by the Supreme Court on 5 August 1971 (AIR 1971 SC 2204). The firm had been assessed for four years at the rates for registered firms. The Income-tax Officer later issued notices proposing to rectify the assessments by applying the maximum rate under section 17(1) of the 1922 Act. That turned on whether a firm was a “person” for that section. The Bombay High Court held there was no obvious mistake, and the Supreme Court agreed. It held that “A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions.”

The test cuts both ways:

it limits what the department may do to the taxpayer’s detriment;
it equally limits what a taxpayer may obtain by rectification.

Typical mistakes within it:

a TDS credit shown in Form 26AS but not given;
an arithmetical slip;
interest computed on the wrong base;
a deduction disallowed although the claim and its support are on the record.

A debatable question of law, or a claim needing fresh evidence, belongs in an appeal or, within time, a revised return.

Who may rectify, and the limits on the power

Who may rectify: the income-tax authority that passed the order or issued the intimation (section 154(1)). That authority “may” act on its own motion, and “shall” rectify a mistake brought to its notice by the assessee, deductor or collector (section 154(2)).
Matters decided in appeal or revision: where a matter has been “considered and decided” in appeal or revision, rectification is barred on that matter but not on others (section 154(1A); section 287(2)).
Enhancement: an amendment “which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability” needs notice and “a reasonable opportunity of being heard” (section 154(3); section 287(4)).
Effect: every amendment is made by a written order (section 154(4)). A reduction leads to a refund (section 154(5)). An increase leads to a notice of demand deemed issued under section 156 (section 154(6)), or under section 289 for 2025 Act years (section 287(7)).

Time limits

For the amendment: “no amendment under this section shall be made after the expiry of four years from the end of the financial year in which the order sought to be amended was passed” (section 154(7)). The 2025 Act measures from the end of the financial year “in which the order or intimation sought to be amended was passed” (section 287(8)). In both Acts the four years apply to the date of the amendment, not merely to the date of the application.
For an application: the authority must, within six months from the end of the month in which the application is received, either make the amendment or refuse the claim (section 154(8); section 287(9)).
The section 155 exception: section 155 (section 288 in the 2025 Act) sets its own periods for certain consequential amendments, such as those following a firm’s assessment.

The portal’s rectification FAQs say that a request to the Centralised Processing Centre cannot be filed after four years from the end of the financial year of the intimation. The same FAQs mention a “File rectification to AO” option for such cases. The statutory four-year limit binds the Assessing Officer as well, so that option does not extend the period.

What to have ready

The intimation or order, with its date and reference number.
The precise mistake: the figure in the order, the correct figure, and where on the record the correct figure appears.
Form 26AS, AIS and TIS, where the mistake concerns tax credits. See Reconciling AIS, TIS and Form 26AS.
Challan details for advance tax or self-assessment tax not credited.
The corrected return data, where the request type requires re-entry of schedules.

Rectification on the portal

The e-filing portal distinguishes two routes:

Orders and intimations of the Centralised Processing Centre. The user manual’s path is Services > Rectification > New Request, selecting Income Tax and the assessment year. The prerequisite is an intimation under section 143(1) from CPC. The request types the manual lists for income tax are:
1. Reprocess the Return;
2. Tax Credit Mismatch Correction (schedules pre-filled from the processed return, with TDS, TCS, advance tax and self-assessment tax details to edit or add);
3. Additional Information for 234C Interest;
4. Status Correction, for ITR-5 and ITR-7 up to assessment year 2018-19 only;
5. Exemption Section Correction, for ITR-7 for assessment years 2013-14 to 2018-19 only;
6. Return Data Correction (Offline) and (Online).
Orders of the Assessing Officer or the Commissioner (Appeals). The portal’s FAQs say that for these the taxpayer selects the option for a request to the Assessing Officer seeking rectification, or “Rectification of Orders passed by CIT(A)”, from the same Rectification service.

The FAQs warn against using Return Data Correction to declare a new source of income or an additional deduction. That is the work of a revised or updated return. See Belated and Revised Returns and The Updated Return (ITR-U).

On verification the portal’s own pages differ. The user manual says that after submission the filer is taken to the e-Verification page. The FAQs say there is “no need to E-verify rectification request”. Each request receives a 15-digit rectification number, which can be tracked under Rectification Status.

Rectification initiated by the department

Where an authority proposes rectification on its own motion, the portal’s e-Proceedings manual lists the communication as “Suo-moto Rectification u/s 154”. For each mistake proposed, the taxpayer selects either “Agree and proceed with rectification” or “Disagree and object to the rectification”, giving a reason from a dropdown for any disagreement. An enhancing amendment made without this opportunity offends section 154(3).

What follows a rectification order

An order under section 154 that enhances the assessment, reduces a refund, or refuses the assessee’s claim is itself appealable to the Commissioner (Appeals) under section 246A(1)© (section 357(g) of the 2025 Act). Section 154(8) fixes a period for deciding an application. It does not, however, deem the claim allowed if that period passes without an order.

Summary

Identify the Act: section 154 for assessment year 2026-27 and earlier, section 287 for tax year 2026-27 onwards.
Test the grievance against Volkart Brothers. It must be an obvious mistake on the record, not a debatable point.
Check the four-year limit from the end of the financial year in which the order or intimation was passed.
File on the portal through Services > Rectification, choosing the CPC route or the Assessing Officer or CIT(A) route and the correct request type, and note the rectification number.

The next guide in this set covers responding to an outstanding demand.

← Back to all Income Tax guides