Mistakes to be avoided while filing ITR

Last Updated On: June 19, 2020, 11:53 a.m.
...

Mistakes to be Avoided While Filing Income Tax Return

Income Tax Return is the form in which assessee files information about his Income and tax thereon to the Revenue Department. Various forms are ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7.

As per Section 139 (1), it is mandatory for every person – be it a company, or a firm, or a person other than a company, or a firm, whose total income or the total income of any other person in respect of which he is assessable under the Income Tax Act, during the previous year exceeded the maximum amount which is not chargeable to income-tax – to file a return on or before the due date.

All the taxpayers are mandatorily required to file their ITRs electronically except individuals over the age of 80 years who have the option of filing the ITR in paper format as well.

Mistakes you should Avoid While Filing Income Tax Return

  1. First and the foremost thing is to file Income Tax return on time. Due to COVID-19 Pandemic, the dates for income tax return for the Financial Year 2019-20 have been increased to 30th November 2020. Late filing attracts a penalty and also robs you off certain benefits for example losses from capital gains, business or profession cannot be set off in subsequent years in case of late filing, etc.
  2. One of the main errors done by many taxpayers is the selection of the wrong ITR form. It is very important to select the correct ITR Form. There are total 7 ITR Form’s i.e. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7 which can be filed by a taxpayer depending on his/her source of income. Since the forms are revised every year, it may so happen that taxpayers no longer have to file the same ITR they filed last year based on the changes.
  3. Taxpayer not disclosing his/her All Sources of Income. This mistake is mainly done by salaried employee’s as generally; other source of income is not disclosed by them. Other sources would include interest income, rent on house property, capital gain, etc.
  4. Not reporting Exempt Income in Income Tax Return. Income Tax laws require a taxpayer to report all his income whether exempt from tax or not.
  5. Mismatch of Income with Form 26AS. It is advisable to keep all your TDS certificates ready while filing income tax returns such as Form 16, Interest certificates from the bank (Form 16 A), TDS certificate on sale of property (Form 16 B) together and check whether correct TDS has been deducted against your PAN, with the entries in your Form 26AS.

        Form 26AS is a consolidated tax statement that reflects TDS deducted against your PAN from all sources. Make sure that            there is no mismatch in the values, in case there are, you must inform the deductor immediately to correct it from his or            her end. Any discrepancy in this regard will prevent taxpayers from claiming a tax credit against TDS later on.

  1. All your investment certificates should be with you when filing your income tax return so, that you can claim a deduction of the same.
  2. Link PAN with Bank Accounts: It is important so that in case there is a refund, it gets credited to your bank account. You are required to validate your bank account details on the income tax website now.
  3. Delaying e-verification on return. Until the returns are verified, the procedure of filing for returns remains incomplete. Taxpayers have two options for verifying the returns:
  • Either sending the Income Tax Returns Verification acknowledgment to CPC, Bangalore within 120 days of filing the returns; or
  • An easier option would be, e-verifying your returns online. The procedure of e-verification can be done via net banking, Demat account, Aadhaar number, and bank account number. There will be no requirements to send the ITR V if you e-verify the returns online.
ABOUT LEGAL SUVIDHA

Copyright © 2019 - All Right Reserved