Top 5 common Income Tax mistakes taxpayers must avoid while filing ITR online
Income Tax Alert: Income Tax Return (ITR) filing is the first and foremost responsibility of an earning individual.
Income Tax Alert: Income Tax Return (ITR) filing is the first and foremost responsibility of an earning individual. In the era of digitisation, people are advised to file their ITR online provided they have some idea about the selection of ITR form, extent to which they can disclose their sources of income, TDS etc. Generally, there are some common mistakes that income tax filers are advised to avoid. Photo: PTI
Shun Mistakes
Speaking on the common mistakes that an earning individual commits while filing its ITR Harsh Jain - Co-founder & COO at Groww said, "First and foremost thing that an earning individual should keep in mind is to file ITR on time. Apart from that selection of ITR form, not disclosing the source of income, mismatch in Form 26AS and other TDS certificates etc., are some common mistakes that people commit while filing an ITR." Photo: Reuters
Wrong ITR Form Selection
This is something every taxpayer needs to take heed of while filing ITR. Every year the income tax department releases revised ITR forms that specify the eligibility criteria. Each ITR form differs based on the nature of income that needs to be disclosed by the assessee. Since the forms are revised every year, it may so happen that you may no longer have to file the same ITR you filed last year based on the changes. You may also have to disclose additional details as new fields may be added to the revised forms. Please be very careful while assessing your eligibility and file the correct ITR based on the nature of your income. The use of incorrect ITR may lead to an intimation from the Income Tax department [ sec 139 (9)] asking you to revise your return within 15 days. Failure to do so will lead to your Income-tax return being considered as invalid or “not filed” and other penalties may follow. Photo: Reuters
Not Disclosing All Sources Of Income
This is a mistake many salaried individuals make. You need to disclose all sources of income apart from your salary while filing your return. The sources other than your salary include income from bank savings, rental income from house property if any, capital gains income, etc. It is advisable to report tax-exempt income such as dividends, gifts received, interest on tax-free bonds, etc. You must also disclose income from foreign assets as well. Basically, any income on which TDS has been deducted needs to be disclosed. Do not hide any information as all records are now integrated online and any mismatch in your income reporting may put you under the scrutiny of the Income Tax Department. Photo: Reuters
Mismatch in Form 26AS Details and Other TDS certificates
This is a very important point that taxpayers often overlook, which leads to reconciliation issues later on. It is advisable to keep all your TDS certificates like Form 16, Interest certificates from the bank (Form 16 A), TDS certificate on sale of property ( Form 16 B) together and check whether correct TDS has been deducted against your PAN, with the entries in your Form 26AS. Form 26AS is a consolidated tax statement that reflects TDS deducted against your PAN from all sources. Make sure there is no mismatch in the values, in case there are, you must inform the deductor immediately to correct it from his or her end. Any discrepancy in this regard will prevent you from claiming a tax credit against TDS later on. Photo: PTI
Not Claiming deductions correctly
It is possible that you may have not been able to submit tax saving investment proofs to your employer and hence the details were not recorded in your Form 16. However, even if you did not declare your investments to your employer, you can still claim a tax relief while filing your income tax returns. Keep the details of your investments with you as supporting documents so that you can claim these deductions. Also, in case you have multiple form 16s , make sure you also disclose salary details of all employers you changed within a financial year. Photo: PTI
Not filing Tax Returns on Time
This is the biggest mistake that taxpayers should avoid. Tax filing should not be a last-minute thing and the necessary documents and TDS forms should be collected well in advance. Not only does late filing attracts penalty, but also robs you off certain benefits. For instance, losses from capital gains or business or profession cannot be set off in subsequent years in case of late filing. (Loss on the property, however, can be set off as an exception). Photo: Reuters