11 common mistakes to avoid while filing your Income Tax Returns
If you are planning to file your own tax returns this Income Tax Returns (ITR) filing season, there's a good possibility that you might make a few mistakes, which could cost you dearly later. Here's a list of most common mistakes people make while filing returns.
With due apologies to accountants, tax is among the most boring subjects you could have to deal with and if you're planning to file your own tax returns this Income Tax Returns (ITR) filing season, there's a good chance you may make a few mistakes that could cost you dearly later.
Read on carefully for here is a list of most common mistakes people make while filing returns:
1) Not filing returns: The biggest mistake people make is not filing returns at all. Keep in mind, it is mandatory for you to file your ITR is your annual income above Rs 2 lakh.Prior to this the limit was Rs 5 lakh.
2) Getting basic details wrong:People have ended up entering the wrong PAN and TAN numbers in their forms. You should double check all the details on your ITR forms, especially numbers and spelling.
3) Incorrect forms: There have been some major changes in ITR forms this year. Make sure you choose the correct form. Out of the seven forms, only four are for individuals and are applicable depending on their situation. Keep in mind, if you choose the wrong form, it will considered by the IT department as a failure to file returns.
4) Filing multiple ITR forms for multiple form 16s: Changing jobs is very common these days, which means you may have multiple Form 16s. One mistake many make is filing separate ITRs for each Form 16, instead of showing all Form 16s in a single return.
Also make sure you submit all the relevant Form 16s. If your past employer has deducted tax too, there's a good possibility you might qualify for a refund.
5) Mistakes in bank details:Tax payers often make silly mistakes while filling their bank details in the ITR form, especially the IFSC code of the bank. From this year refunds won't be issued via cheques, and only through ECS. Therefore, it's essential to ensure you submit the correct bank details, like the 9 digit account number. Also, ensure that the bank account you've mentioned on the form is an active account.
6) Giving the right correspondence details: Another common mistake made is in the submission of email ids. Ensure you mention your personal email address and not your official email address. If you change jobs, you won't have access to that email in the future, and might miss out on correspondence from the IT department. The same goes for your mobile number, give in details of your personal mobile number and not your official mobile number.
7) Failing to claiming deductions: One very common mistake is failing to claim tax deduction under Section 80 TTA, which was announced in the Union Budget a few years back.
According to this section, savings account interest income up to Rs 10,000 will get a tax deduction. Savings accounts in held in banks and India Post come under this section. Keep in mind, that this deduction of Rs 10,000 on savings account interest income is all bank accounts put together. You could miss out on a good tax benefit by ignoring this one.
8) Not listing all sources of income:Many tax payers think that interest income from savings and fixed deposit accounts is not taxable or that the tax has already been deducted by the bank. Banks do deduct TDS on fixed deposits, but that does not mean you don't mention the income in the ITR form. Failure to mention all sources of income could get you into trouble with the IT department.
9) Failing to mention commissions: If you receive some form of commission as a source of income, for instance insurance commission, make sure you mention that on the form.
10) Not keeping track of tax rule changes: Tax rules change every year and here are a few mistakes you might make inadvertentlythis year. Not mentioning details under Section 10 - that is giving details of various allowances you receive. You could also remember to claim deduction under Section 80 CCG, if you've invested in Rajiv Gandhi Equity Savings Scheme fund in the applicable financial year.
11) Not sending the ITR-V submission:Simply filing your returns online doesn't mean the deed is done. Ensure that you send a physical copy of the ITR-V acknowledgement which the IT department sends you to their CPC Banglore office within 120 days. Ensure, that you sign the copy in blue ink, and send the copy via registered post. Do not use a courier.
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