The season for filling the Income Tax return is back. Everyone whose income is above INR 5 lakhs are required to mandatory e-file their income tax return. It is important that you file your Income tax return without any errors for avoiding any issues in the future. Below are some of the most common mistakes to avoid while filing income tax returns.
Some of the Common mistakes to avoid while filing income tax returns
Wrong personal details:
Yearly huge numbers of returns are rejected due to incorrect personal details such as name, bank account number, address and IFSC code. This causes delays in the processing of the refunds. So ensure that all the personal information which you provide is correct in all sense.
Errors while claiming deductions u/s 80C:
Some of us think that the employer’s contribution to EPF should be included for claiming the deductions under sec 80C. That is incorrect. Likewise only the principal amount that is repaid on any housing loan is allowed as a deduction for sec 80C. There are many other deductions that are claimed under the wrong heads which lead to their rejection and subsequent rise in tax liability.
Certain incomes are missed to be included
There are some incomes that are not included erroneously. Some of the most common incomes which are left out are:
- Interest on bank Fixed Deposits
- Income from investments made in name of spouse/children.
- Income from the previous employer
Failure to disclose the interest Income on savings account:
Even though the interest which is received in the savings account up to INR 10000 per annum is not taxable but still, the interest which is received is required to be provided in the return under the ‘Income from other sources’ head. The deduction for the same is available there.
Failure to report exempt income:
Exempted Income such as dividends, PPF interest, maturity proceeds of insurance policies, LTCG from equities etc. are required to be provided in a separate annexure of ITR. It would ensure avoiding unnecessary queries from the income tax department at a later stage.
Missed to disclosed more than one property
Today, many of us would have more than one property. These properties might be self-occupied or vacant. However, according to Income Tax Act, 1961, only one property could be claimed as a self-occupied property. The other property would be taxed at the realizable municipal rates after deducting 30 percent for repairs and taxes.
Difference in TDS details
Some of us file their income tax returns without verifying their Form AS26 credit of TDS. If your employer or someone has deducted the TDS and has not deposited the same with the Income Tax Department or has failed to provide your PAN details correctly, the amount so deducted won’t reflect in the from AS26 which would lead to default. Therefore you should check the credit for TDS that has been deducted in Form AS 26. In case there is an issue, take proper action for rectifying the same.
Failure in paying the advance tax or self-assessment tax
Most of us earn income where TDS is not applicable. The individual in such case should calculate his tax liability and pay the Advance tax or self-assessment tax prior to the closure of FY (financial year, i.e, March 31st). Failing to do so would attract a penalty of 1 percent /month from 1st of Apr next FY. Some people also file their returns without clearing off their applicable penalty dues.
Filing the wrong form
Some of us are not able to choose the right income tax return form due to lack of proper knowledge or guidance.
The Bottom Line
Filing incorrect tax returns would lead to several troubles and headaches. Please do not make the above-mentioned mistakes. In case you aren’t confident enough about filing the income tax returns by yourself please take help of professionals. It is important that you file your returns correctly and timely for ensuring mental peace.