MISTAKES TO AVOID WHILE FILING INCOME TAX RETURN
Here are Few mistakes that income tax assessees often make when it comes to tax-planning:
1. Missing The Due Date
Wealth planners emphasize the importance of meeting income tax deadlines. Needless to say, failing to report your income through an ITR in due time may lead to penalty. This penalty can go up to ₹ 10,000.
2. Using The Wrong Form
A common mistake that taxpayers often make — especially those waiting until the eleventh hour to ready their details to complete their income tax filing process — is using an incorrect form. Filing an income tax return using an incorrect form is deemed "defective" under tax laws. This is why it is important to have a sound understanding of applicable income tax forms.
Although the Income Tax Department has over the past few years simplified the income tax filing process to a great extent, one can take the help of a professional accountant to manage an income tax return.
3.Filling The Form Incorrectly
Last minute rush also leaves a big window for filling incorrect details. For instance, ITR-1 asks the assessee to provide details such as salary income, income from property and interest income. One must file the ITR well before the last date to be able to furnish all details correctly.
4. Selecting Wrong Assessment Year
Many taxpayers confuse Assessment Year with Financial Year. Always remember: Assessment year always follows financial year, in the sense that income generated in, let's say, financial year 2018-19 can be understood as income generated in assessment year 2019-20.
5. Failing To Mention All Sources Of Income
Being transparent about income earned from all sources is both mandated by law and paramount. Not only failing to do so leads to discrepancies in one's tax records, it also increases the possibility of you receiving a tax notice from the Income Tax Department and can even be read as tax evasion.
Ensuring clearly disclosing any income from multiple sources, including any income arising in the form of interest on investments and bonds, rent from property, and income in the form of dividends and gains from life insurance policies is a must. Any non-disclosure is a serious offence.
6. Claiming Deductions Inappropriately
There is a whole world of deductions and exemptions available under tax laws. Even if you manage your tax outgo yourself, taking the advice of a professional chartered accountant from time to time to learn about any changes in tax laws is a good idea to keep yourself thoroughly updated on the subject. There may be any new rules applicable in your case that you may be unaware of.
7. Not Paying Attention To Form 26AS and TDS Certificate
What the much-talked about form 26AS contains is basically information about any taxes credited to your Permanent Account Number (PAN). One can say it is in all means an income tax assessees tax passbook, detailing any tax refunds and tax demands related to your PAN.
8. Failing to fill form in case of arrears of salary
Salaried employees may get arrears payment due to pay revision. In that case, the tax burden for the salaried employee may increase because of the burden of past dues paid in the current year. The Government has made provisions to provide relief to salaried employees in case of salary arrears in a particular year. The tax relief under Section 89 covers salary arrears and advance salary as well. The relief under section 89 can be claimed by furnishing particulars of income in Form 10E. Prerequisites to file Form 10E are valid user ID and password of e-filing portal.
It is mandatory to file Form 10E if you want to claim tax relief on your arrear/advance income. In the case of non-filing of Form 10E, the Income Tax Return will be processed but the relief claimed u/s 89 will not be allowed, even the details of the relief claim are entered in the ITR.
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