Every year whose income is more than the basic exemption limit is required to file ITR. To reduce unnecessary problems, it’s mandatory to file ITR without mistakes. In this article, we will talk about the most common mistakes committed by an Individual while filing ITR.
- Incorrect details:
Every year a hefty number of returns is rejected due to incorrect details like name, bank account number, IFSC code, and address. This leads to delays in refunds. So check the details twice before filing return.
- Failure to include certain income:
There are certain incomes which are left out wrongly.
Which may be as follows:
- Interest on Fixed deposit
- Income from investments made in the name of spouse/children.
- Income from the previous employee
- Income from Children.
- Arrears of Salary if not previously taxed.
- Mistakes in claiming deductions under section 80C:
Many persons are not clubbed interest on EPF for calculation of 80C and claimed under section 80C which is not correct. Whole PF balance (including interest) is tax-free if withdrawn after a continuous service of 5 years. Also, only the principal repaid on a home loan is eligible for section 80C. Many other deductions are claimed under wrong heads heading to rejection and consequent arising of tax liability.
- Interest Income on savings account:
Though interest received in savings account up to Rs 10000/- a year it is deductible under section 80TTA, the interest received in all saving accounts has to be entered in the return under the head ‘Income from other sources’ and also under deduction.
- Non-reporting of exempt income:
‘Exempted Income’ such as Agriculture income, the share of income from the firm, interest paid to a non-resident, Interest on PPF, Dividend, LTCG on equities, maturity proceeds of insurance policies need to be mentioned to reduce unnecessary income tax queries.
- Failure to account for more than two property:
Many people own more than one property. It may be self-occupied or vacant. However as per the latest amendment in Income Tax Act 1961 through Interim Budget 2019, now two properties can be claimed as self-occupied. And the rest other properties are taxed at realizable municipal rates after deducting 30% for taxes and repairs.
- Failure to pay advance tax on time:
Every person needs to pay advance tax if their total tax liability exceeds 10,000. If a person fails to pay advance tax on time or do not pay any advance tax during the year, they have to pay interest under section 234B & 234C. To avoid this every person is required to calculate the tax liability and pay Advance tax on time.
- The discrepancy in 26AS (TDS):
Many of us file returns without verifying Form 26AS credit of TDS held with the IT Department. If your employer or any other person who has deducted TDS did not deposit the same with the IT Department or failed to mention your PAN Correctly in TDS return, that amount will not reflect in form 26AS. Thus do check that credit for TDS deducted has reflected in Form 26AS. If there is a problem, take timely action to rectify the same.
- Filing of incorrect ITR Form:
Many are unable to choose the correct Income Tax Form due to a lack of knowledge. For example – Deepak is a salaried person, owned one house, gets some tax-free allowances and interest in the savings account and along with-it having income from Other Sources (including Winning from Lottery, bets on Horse Race and other legal means of gambling). He may feel that he needs to fill ITR 1 which is not correct, and he requires to file ITR-2.
- Failure to dispatch ITR V in time:
If you do not have a digital signature (DSC), or Aadhar OTP while e-filing IT return, it is mandatory to send duly signed ITR V to CPC Bangalore by ordinary or speed post only. Sign the ITR-V (Acknowledgement) in blue or black ink in the box provided. The ITR-V (Acknowledgement) has to be sent to CPC within 120 days from the date of filing of return. If you fail to do so within a specific time your return will be considered null and void.
Incorrect filing of income tax returns will lead to many headaches and troubles. This is not what we want. So please avoid above mentioned mistakes. If you are not assured of filing return all by yourself please seek professional advice. It’s better to file ITR correctly as well as on time. Happy filing of return!