With the deadline for filing of return of Income Tax Returns (ITR) being July 31, salaried individual taxpayers are advised to exercise some measure of wariness in filing their returns.
Filing ITR is generally fairly straightforward but the smallest mistake can lead to questions from the tax authorities and potential penalties.
Several common mistakes include incorrect personal details entered, wrong tax forms are chosen, and failing to compare with form 26AS. Further, most taxpayers fail to mention income from other sources or income exempt under the Income Tax Act, do not provide complete details of their bank statements or, often, do not e-verify their ITR.
How to file for ITR?
The requirements for filing your ITR include; Pancard, Aadharcard, bank statement, and form 16 and for income evidence you require investment documents. Select the correct income tax return form given your source of income and the qualification criteria. Complete the form to the best of your knowledge and ability by giving full information about the gross income taxes, income deductions, and exemptions to be claimed. This may entail cross-checking the information/input details to minimize mistakes.
Once done, you must file the ITR electronically using the Internet-based application provided by the Income Tax Department. After the submission process is completed, e-verify it via Aadhaar OTP, net banking or any other recognised means of identification within 120 days. In addition, always ensure that all documents and acknowledgements are retained as originals and copies for future purposes.
Before the deadline, taxpayers are encouraged to review their submissions to avoid a lot of trouble with the authorities concerning the tax laws hence reducing the chances of having complications.
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Incorrect Tax Form Filings:
Fill in all sources of income and options correctly in the relevant ITR form where you are reporting all the income and income receipts that are taxable as well as the ones that are not taxable. For instance, for persons with income below Rs 50 lakhs of gross income without any capital gains, the ITR one should be used. Seemingly, the wrong form implies that awful blunders could happen, you’re likely to be penalised, and the return could become defective.
Neglecting Form 26AS:
The 26AS form is a detailed form displaying your total income, TDS, self-assessed tax, and advance tax liability details. To make the results accurate, you can compare this data with your employer’s form 16. Such differences may lead to fewer refunds issued or more taxes that the taxpayers would need to pay to the IRS.
Failure to Report Other Sources of Income:
The interest earned on savings accounts such as fixed deposits and dividends are also reported under Section 56 of the Income Tax Act. Excluding these earnings could provoke problems with the IT department or other employees involved in the process.
Overlooking Exempted Income:
It is also possible for even the income to be exempted to be claimed all the same. For instance, investing the sale proceeds of a house to buy another one is tax-free under section 54 of the Income Tax Act but it is to be included in the ITR.
Incomplete or Incorrect Bank Details:
Bank-specific details such as the name of the bank, IFSC code, and the account number must be mentioned correctly to obtain the refund. This is normally the case especially where the details provided for the bank differ from the actual ones from the clients’ side hence a common reason for delay. Make sure that your bank account is pre-certified to avoid the chance of rejection during processing.
Failure to e-Verify ITR V:
In case after filing the ITR, it is mandatory to verify it within 30 days from the date of filing. Without validation, the return would be turned down by the IT department and thus will be considered null and void. Failure to respond to these notices serves as a basis for imposing more penalties.
Given below are some of the mistakes that one should avoid to ensure the process of tax filing becomes as stress-free as possible. File your documents in order right from the beginning, and double-check everything to avoid stressed end minutes and problems with ITD.
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