Filing Income Tax Return? Six most common mistakes taxpayers must avoid or face consequences
Income Tax Return filing: It's easy to file income tax returns these days. While filing ITR online, you don’t need to do calculations now as it is taken care of by the software.
Income Tax Return filing: It's easy to file income tax returns these days. While filing ITR online, you don’t need to do calculations now as it is taken care of by the software. However, you need to put in the correct numbers and information in the right places. However, often people make some careless mistakes while e-filing ITR which can either make their returns defective or create hurdles in getting an income tax refund. Vishvajit Sonagara, Founder & CEO, Quicko.com, shares with Zee Business Online some common mistakes one should avoid while e-filing ITR.
1. Incorrect Basic Details: It’s important that you mention basic details such as PAN, Personal Information, e-mail ID, bank account number and IFSC code correctly. Quoting the wrong PAN means that your return will be rejected by the income tax department since the name for the given PAN in their records will not match with the name and PAN that you have provided. The taxpayer’s name and date of birth should match with the one mentioned on the PAN card. Providing the addresses email address and contact number are also crucial as they are used by the Tax Department to communicate with the taxpayer. So, make sure that you provide all the information mentioned correctly.
2. Choosing Incorrect ITR Form: It is critical that you select and file the ITR Form applicable to you. ITR forms are based on different sources or combination of incomes. For example, if you have only salary income, select ITR 1 but if you have salary income as well as capital gain than you need to select ITR 2. Filing returns with incorrect ITR form may lead to rejection of ITR. Therefore, it is very important that you choose the correct ITR Form. But, you do not need to worry about choosing the correct ITR if you are e-filing your return with Quicko.com since our software does that for you. Quicko determines the correct ITR for you based on the incomes and deductions that you have provided.
3. Fail to list all sources of Income: Taxpayer must report all types of incomes TAXABLE as well as EXEMPT. It is a wrong belief that if an income is tax-exempt, no need to report it. Some of the examples are the sale of shares or mutual fund units, interest earned on a savings account or fixed deposit, etc. Even though banks deduct TDS on fixed deposit interest that does not mean you don’t mention the income in the ITR form. If you do not mention all sources of incomes in your ITR than in it is called concealment of income and you don’t want to get into trouble because of that.
4. Failing to claim deductions: One very common mistake is failing to claim tax deduction under section 80 of the Income Tax Act. You may have made some investments or incurred some expenses which are allowed as a deduction under chapter VI A, however, you miss out on claiming the same. As a result, you will lose your hard-earned money by way of taxes or worse you could miss out on a potential tax refund. So it is very important to mention all your deductions at the time of filing your income tax return.
5. Checking your Tax Credits: One of the most important things to do before you e-File is to ensure that you have checked your ‘Form 26AS’ for any potential tax credits. Form-26AS contain details regarding incomes & taxes deducted from the same, advance tax, self-assessment tax, etc. All these tax credits will help you in getting a refund and avoid additional tax demands.
6. Forgetting to Verify your ITR: Just e-Filing your ITR is not enough. The process of filing has not completed yet. Once you submit the return, you will receive ITR-V on your registered email address. If the return is filed online, without the Aadhaar number or digital signature, you will have to verify your return post-e-Filing. You have two options. You could either send a physical signed copy of ITR-V to the CPC (Centralized Processing Center) at Bengaluru within 120 days from the date of filing return or you could simply e-Verify your income from the ease of your home/office. There are several ways to e-Verify your income tax return.
If you forget to e-verify your income tax or fail to send ITR-V to CPC Bangalore then it will be considered as if you have not filed your ITR and the tax department will not process your ITR. You will have to e-File your income tax return once again.
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In short, if you take into consideration the above mistakes and avoid them, you can easily file your ITR without any hassle. A return filed without any errors will essentially ensure a quick return.