With the due date of July 31 fast approaching, it’s time to file the income tax returns (ITR) and get yourself aware of mistakes made by most people while filling their returns, which consequently lead to IT notices or over/underpaying taxes as well.
As they say, smart people learn from their mistakes and geniuses from others, so here we have compiled some mistakes that most of the people make. Consider yourself a genius, and make sure not to repeat them.
- Waiting until the last date to file the ITR – Just like people procrastinating their investment plans, they do the same with their ITRs as well. The government has simplified the tax mechanism by introducing an online filing system. It means, instead of running behind chartered accountants and other tax experts, you can easily file your return from the comfort of your home without the help of anyone and that too 24×7!
- Delaying the e-verification of returns – Even if you have filed the returns, the procedure is incomplete unless you don’t verify the returns. For verification of returns, taxpayers have the following two options –
- Either send the hard copy of the Income Tax Returns Verification acknowledgment to CPC, Bangalore within 120 days of return filing via ordinary or speed post, or
- E-verify your returns online. You can e-verify your return form via net banking, Demat account, Aadhaar number and bank account number
- Submitting the incorrect personal details in the ITR form= To enjoy the benefits of online tax filing, it is mandatory to register on the official website of the Income Tax Department. For ensuring the hassle-free e-filing process, you must furnish the correct personal details, like postal address, email-Id, mobile number, date of birth, etc. Remember, any mistake in your information can lead to issues in the future.
Further, even if you are not eligible for tax refunds, it is compulsory to give correct bank account details. While filing returns online, always double check to ensure that the name, bank account number, IFSC code match with the credentials mentioned in the income tax portal.
- Hiding bank account details= Many people don’t disclose the details of all their bank accounts which have been functional in a financial year. However, this practice is illegal as the Income Tax Department has made it mandatory for every taxpayer to submit all the bank account details registered in their name. Also, if there is a cash deposit of more than Rs 2 lakh during the demonetisation tenure (i.e., 9th November-30th December 2016), it is mandatory to mention it in a separate column in the form.
- Ignoring the differences in TDS figures= If you overlook the TDS details, your application can become invalid. Make sure that the figures of TDS made on your income is also visible in the form 26AS and the figures are matching.
Further, you can use the online income tax calculator to compute your tax liability and avoid any discrepancy in the ITR form.
- Giving wrong financial data= It is one of the common reasons for the rejection of ITR when your salary details contradict with the TDS. It is necessary that the income from other sources like short-term capital gains, bank interest, house property income, etc.; should be defined.
- Using the wrong form= Filing the wrong form is the common mistake make by most of the taxpayers. As of now, there are 7 ITR forms to choose depending on the basis of your income. It is essential to choose the right type of ITR form to avoid its rejection by the Income Tax. A lot of changes have been made in ITR forms, so carefully read the instructions before filling.
Here are the types of ITR forms
|ITR Form||Who Should Fill?|
|ITR – 1 (SAHAJ)||Individuals getting income from salary and interest|
|ITR-2||Individuals and HUFs not having business/professional income|
|ITR – 3||Individuals and HUFs being partners in firms and not carrying out business or profession under proprietorship|
|ITR – 4||Individuals and HUFs having income from proprietary business or profession|
|ITR – 4S (SUGAM)||Individuals and HUFs having income from presumptive business|
|ITR – 5||Firms, AOP and BOI|
|ITR – 6||Companies other than companies claiming Exemption U/s 11|
|ITR – 7||For Persons including companies required to furnish return under Sections 139(4A) / 139(4B) / 139(4C) / 139(4D). (Not Opting For E-Filling)|
|Acknowledgment (ITR V)||Where the data of return of ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 is filled electronically without digital signature|
Pay heed to the above details and enjoy a smooth tax filing process. Have a happy tax filing!