With the deadline for filing Income Tax Return is approaching, we need to keep few things in mind. As ITR filing has become a completely online process, you just need to fill details and follow different steps to complete the process. However, there are always chances of committing mistakes or filling the wrong information. Misreporting an income or furnishing incorrect details can get you a tax notice.Here are some common mistakes that taxpayers make:
Mismatch in income and tax deductionMismatch in income and tax deduction is a common mistake. The taxpayers are always advised to reconcile their income with that in Form 26AS and Form 16/16A before filing return.
Missing out incomeThe taxpayers should always ensure that ITR forms carry all information about their income sources. It is important to report taxable as well as exempt incomes in the form. Hiding of income is considered a serious offence under income tax rules. For example, taxpayers must mention the interest income earned on a savings account or FD even if the bank has deducted the TDS.
E-verification of ITR filingThere are cases where people file tax returns but do not e-verify it. The taxpayer is needed to e-verify the ITR once filed. It can be done either through Aadhaar-based OTP, netbanking or demat account. One can also manually dispatch a signed copy of the ITR acknowledgment receipt (ITR-V) to CPC Bangalore. The return is invalidated if e-verification of the ITR is not done within 120 days.
Missing ITR deadlineOne of the biggest mistakes by taxpayers is not to file ITR on time. The entire affair should not be a last minute thing. It not only invites penalties but also robs the taxpayer of various benefits. For example, losses made in business can't be set-off in returns filed in later years.
Claiming wrong deductionsSeveral tax deductions options are available to income tax assesses under different sections-- 80C, 80D and 24(b). These deductions are for investments or expenses.There are various rules and limits to consider while calculating deductions and exemptions. But what happens at times is that taxpayers claim an incorrect amount or deduction under an incorrect section due to lack of proper tax knowledge, which results in variation of tax liability. And because of this, tax notices become inevitable.So it is important to have proper knowledge of tax before claiming deductions.You can always reach out to a tax expert or chartered accountant if you face problems or have little knowledge about the subject.
