Income Tax 2017: Last minute guidelines to avoid common tax filing mistakes
Only a few days left for this financial year to end and tax filing deadline is striking the calendar. Indian Government has already taken many initiatives to simplify the tax filing process by introducing new ITR forms, online filing facility etc. Yet many taxpayers tend to make silly mistakes while filling up the ITR form. This is the checklist for you so that you can avoid those common mistakes during your ITR Form filling process.
Selecting the right ITR form
Picking up the incorrect ITR form is one of the most common mistakes that almost all taxpayers make at least once in their life. Choosing wrong ITR forms can result in rejection of your returns. And, this year, ITR forms has been modified to make it simpler but on the other hand, it might confuse new taxpayers as well.
To avoid such mistakes, you must read the “Description” column available in the official income tax website. In official website’s “New ITR forms” section descriptions have been given for all the available ITR forms which look similar to this photo.
You must select the ITR Form by reading the description carefully so that your tax returns do not get rejected by the Income Tax Department.
Be careful while entering personal details
Another most common mistakes all taxpayers do is providing wrong or incorrect personal details. Taxpayers tend to fill in incorrect PAN details, correspondence address and bank details. These mistakes can be avoided only by cross-checking the information after filling up the form. Providing this information incorrectly may result to disallowing tax credit refund.
Other personal details that you must enter carefully is your mobile number and email address if you are filing taxes online. Mobile number is where you receive OTP and email is where you receive all the mailing correspondence.
Do mention your exempted income
Maybe certain incomes are exempted from taxes but they need to be mentioned in your ITR form. Income such as dividends or long-term capital gains or equity funds or PPF investments is exempted from tax liabilities. Also, gifts received from blood relatives or agricultural income up to the certain limit are exempted from tax.
However, these exempted incomes required to be mentioned in the tax return form. The misconception of ignoring these income to be disclosed in ITR might lead you to an unfavorable complicated situation. If you hide such income from IT department, the investment company or society will anyway send the details to them. So, forgetting to disclose such details can turn to be a legal discrepancy by you.
You cannot avail deduction twice
It is the very common mistakes that taxpayers make mostly in case of switching jobs in the same financial year. In this case, mostly the first company has deducted tax accordingly but the second company might have deducted low tax by considering this job as your whole year income. The second company avails 2 lakhs basic deduction under section 80C considering the income you have earned from them only.
Avoiding tax in such cases is not easy as the previous company must have deposited TDS on your behalf. So, if you do not disclose all your salary income from both jobs, this will result in a mismatch in your TDS form and tax details. You must be aware of the fact that there is no way you can escape your tax liabilities in such cases. In the scrutiny process of IT department, your tax evasion will be detected immediately as a discrepancy.
Include interests you have earned
Under section 80TTA, you can avail deduction up to INR 10,000 on interest earned against saving account deposit. The savings account deposit is the balance you have in your savings account. However, this deduction does not cover the interest you earned on fixed deposits or recurring deposits.
Many taxpayers have the misconception that Section 80 TTA deduction also cover up the fixed deposits or recurring deposits interests. Such interests are taxed at a normal rate and you need to disclose such earnings under the “'Income from other sources” head in the ITR form. If you have deducted TDS at a rate of 10% then also you have to pay additional taxes if you earn over INR 5 lakhs a year. So, this time don’t forget to disclose your earnings made from bank interests.
Be careful with TDS details
It is very important to assure that tax payment you have made last year has been credited to your name. Refer to the Form 26AS which shows all your TDS details which you can access online from official website. You can do it by clicking on the “View your tax credit” option available on the official website of Income Tax Department. It takes only 5 minutes to log in and check tax credit details. You can also do it by accessing Net banking facility with any of the 35 authorized banks.
And must mail ITR-V within time
In the case of e-filing income tax return, you are required to print off the ITR-V Form and mail it to the CPC office after signing it accordingly. ITR-V is the acknowledgment of your income tax return filing. The time frame allowed for sending ITR-V to CPC is 120 days from the date of return filing. Your online tax filing will be regarded complete only after CPC receives this ITR-V.
Once you mail it to CPC keep a track on it to see if CPC has received it or not. In case, CPC does not receive it within 7-10 days of mailing, then contact Ayakar Sampark Kendra and send another copy of ITR-V.
Being careful with these small points can save you from ITR rejection or any other unfortunate situation. Make a check-list with these points and assure you have done these things correctly while filing ITR this year.
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