It is the time of the year
when you need to file your income tax return. The due date for filing income
tax return is 31st July. It is mandatory to file tax return if your income
exceeds the basic exemption limit allowed by the government. The government of
India has made the process of tax filing very easy and hassle-free by
introducing e-filing. In this post, I will discuss some common mistakes that people
make while filing their ITR.
Filing income tax return is
once a year activity if you don't commit any mistake while filing your ITR.
Individuals often make mistakes in the process of tax filing that can
complicate the tax filing process further. I have listed below some common
mistakes that you should avoid at the time of tax filing.
Common Mistakes People make while filing Income Tax Return
Following are some common
mistakes taxpayers make at the time of tax filing:
1. Not filing income tax return
It is the most common
mistake that people forget to file tax return. You need to file your ITR if
your income exceeds the basic exemption limit allowed by the government. To
avoid this mistake always file your ITR and that also before the last date.
2. Using wrong ITR form
Selecting a wrong ITR form
is also a common mistake committed by people at the time of tax filing. Please
note that use of an incorrect form is considered defective even if you file
your income tax return correctly. The IT Department has prescribed various forms
such as ITR 1 SAHAJ - for individuals having income from salaries, one house
property, other sources (interest, etc), and having total income up to 50 lakh.
The other forms are ITR 2, ITR 3, ITR 4 SUGAM, ITR 5, ITR 6 and ITR 7. You have
to select the correct form for your tax filing otherwise your ITR will be
rejected by the Income Tax Department.
3. Incorrect personal details
You are required to mention
correct personal details like name, PAN, address, email ID, contact number,
Aadhaar number, and bank account number with IFSC code to avoid rejection of
your ITR. For example, if you fill wrong bank account number then your tax
refund (if any) will be transferred to that account. Therefore, you should file
your taxes carefully to avoid such mistakes. Also, note that most of the
communication with the IT department happens through email so it is important to
provide your correct email ID.
4. Not checking Form 26AS
It is important to check
your Form 26AS before filing your ITR. Form 26AS is the annual
consolidated tax credit statement issued to PAN holders. This statement shows
all the taxes received by the Income Tax Department against the PAN of the
taxpayer during the financial year. Therefore, always verify your Form 26AS for
any discrepancies before tax filing for the year.
5. Not filing income tax return electronically
If your assessable income
exceeds Rs 5 lakh then you have to compulsorily e-file your taxes. Senior
citizens who are 80 years old or older can choose to file a physical ITR. Click here to read: How to file your ITR online?
6. Not claiming deductions
You should claim your
deductions under various sections of the Income Tax Act to reduce your tax
liability. The government has given various deductions under Section 80. If you
forget to claim deduction while tax filing, you may lose the money by paying
more taxes. Therefore, always mention your deduction under appropriate sections
to reduce tax liability.
7. Not disclosing exempt income
There are several types of
incomes which are exempt from tax, but notifying about the same to the IT department
is necessary. Exempted incomes such as interest on savings account up to Rs
10,000 and dividends from stocks should be mentioned while filing you tax
return to avoid unnecessary queries from the Income Tax Department.
8. Not disclosing interest on fixed deposits
Most of the people often
avoid adding interest earned from their fixed deposits to their total income
while filing ITR. Interest earned on various fixed deposits should be added to the
total income for the year and pay tax and pay tax accordingly to avoid
unnecessary queries from the IT department.
9. Investment in the name of spouse and children
If you are investing your
income in the name of your spouse and children then you have to add the income
earned by your spouse/children out of that investment in your total income
while tax filing.
10. Not verifying ITR
You need to either e-verify
your income tax return, using the e-verify return option on the website, Net
banking, Aadhaar OTP, pre-validated bank account, bank ATM and pre-validated
Demat account to e-verify your return. You can also send a printed and signed
copy of ITR-V to the Bangalore CPC within 120 days from the date of e-filing. If
you forget to verify your ITR then it will be considered as incomplete.
Hope now you will keep these
points in mind while filing income tax return to avoid penalties and any
unnecessary trouble. The last date for filing tax return for individuals is 31st
July.
Also, read: How to file your ITR online?
Also, read: Document needed while filing ITR in India
Also, read: What is NPS (National Pension System)?
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