Avoid these types mistakes in filling IT return... Must read this post
10 common mistakes people make while filing I-T returns
If you are a salaried individual, your taxes are automatically
deducted and paid to the government. If you make income through business
or profession, you pay income tax four times a year. But when it comes
to filing taxes, it can neither happen automatic nor as frequent as a
tax payment.
Mistakes
tend to happen with everything that we don’t do frequently or
regularly. If you commit mistakes in filing your taxes, you may end up
losing refund, paying the penalty and facing prosecution.
If you are a salaried individual, your taxes are automatically deducted
and paid to the government. If you make income through business or
profession, you pay income tax four times a year. But when it comes to
filing taxes, it can neither happen automatic nor as frequent as a tax
payment. It is once a year activity for taxpayers unless they commit any
mistake in the process.
“Mistakes tend to happen with everything that we don’t do frequently or
regularly. If you commit mistakes in filing your taxes, you may end up
losing refund, paying the penalty and facing prosecution,” says Chetan
Chandak, Head of Tax Rresearch, H&R Block India.
Hence to help you avoid such mistakes, we have compiled a list of 10
common mistakes made by tax filers in India. Find out how you can avoid
these tax bloopers.
1. Failing to File I-T Return
Don’t think that your responsibilities end once all your tax dues are
clear. If your income exceeds Rs 2.5 lakh for Financial Year 2016-17,
you need to file an Income Tax Return. Remember that this income is
calculated before accounting for all the deductions.
2. Filing Physical Return where e-Filing is required
The government gives you the option to either file your tax return
physically or do it online. However, “if your assessable income exceeds
Rs 5 lakh, it becomes mandatory for you to e-file your tax return. But
if you are a senior citizen, you can still choose to file a physical
return,” says Chandak.
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3. Not Studying Form 26AS
Your Form 26AS or Tax Credit Statement gives you all the important
details of taxes you have paid. Don’t forget to check it before filing
your tax return. It will help you in eliminating any errors in tax
calculations so that you can file an accurate return.
4. Incorrect Personal Details
Imagine what will happen if your refund gets credited to another
person’s bank account or your refund cheque gets delivered to a wrong
address. Providing incorrect personal details in your ITR can create
several issues like this. Therefore, you must avoid such silly errors
and file carefully.
5. Excluding FD Interest from your Income
Interest income from your savings account is exempt up to Rs 10,000, but
interest income from your FD isn’t. Half knowledge is a dangerous thing
which becomes evident when some people exclude FD interest from their
taxable income. Remember that every single rupee earned in this case is
chargeable to tax.
6. Under-reporting your Income
Remember that hiding your income to evade tax is a crime. If caught, you
can end up paying a heavy penalty and even land in jail. These days,
tax department is easily able to track your income through your PAN.
“Every large transaction is reported annually by companies, banks and
other financial entities to the government. Therefore you must disclose
all your income, clear your tax dues and file tax returns on time. E.g.,
if you have two house properties, you need to add rental income to your
earnings even if you don’t have any. You must disclose income earned
through shares, mutual funds, property capital gains, etc. If you have
switched jobs multiple times in a year, you must bring your income from
all the employers to light,” says Chandak.
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7. Failing to Report Exempt Income
There are several different types of incomes which are exempt from tax.
E.g. if you have dividend income from stocks or interest income from
savings bank account, you can save a good amount of money from tax net
by notifying the tax department about it in your ITR.
8. Using Wrong ITR
The I-T department has prescribed many different ITR forms. You need to
choose your ITR carefully to file your taxes, otherwise, the tax
department will reject it and ask you to file a revised return.
9. Not Verifying Tax Return
This is a very common mistake made by first-time tax filers. Such people
think that their job is done once they have filed their taxes. They
fail to verify their return and send necessary documents to the I-T
department. “If you e-file your taxes, you can either e-verify your
taxes from the I-T department’s e-filing portal or get physical
verification done by sending a printed and signed copy of ITR-V to
CPC-Bengaluru,” says Chandak.
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10. Not Revising Your Return
If you have made a mistake in reporting your income and savings during
the year, you can still correct the return by filing a revised return.
Till previous Financial Year, the government allowed tax filers to
revise return within two years from the end of the Financial Year for
which the return was revised. However, “from this Financial Year or
FY2017-18, you will get only one year to revise your return from the end
of relevant financial year. So, if you find any mistakes from your end
in your filed return, then you should not wait for a notice from tax
department before taking any action. Instead, you should immediately
file a revised one,” informs Chandak.
When you file your tax return, in the Assessment Year 2017-18, avoid these tax bloopers to prevent any unnecessary trouble.