Income Tax: How to avoid common mistakes while filing returns–business today

Clipped from: https://www.businesstoday.in/current/economy-politics/income-tax-how-to-avoid-common-mistakes-while-filing-itr/story/419486.html

The deadline for filing income tax returns (ITR) for financial year 2018-19 has been extended by two months till November 30

The last date for filing income tax returns for 2018-19 is November 30

The Income Tax Department has extended the deadline for filing income tax returns (ITR) for 2018-19 by two months till November 30. The date for furnishing the belated and revised return for Assessment Year 2019-20 has also been further extended to November 30, 2020, in view of the difficulties being faced by the taxpayers due to the pandemic.

With the deadline for filing ITR 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:

Wrong ITR form selection

Many taxpayers choose the wrong ITR form, which leads to rejection of ITR. The taxpayers need to know that forms have been undergoing a change in the last few years. The return forms for this year have seen various changes and the government has also issued guidelines in this regard. The taxpayers must select the forms applicable to them on the basis of their income. For instance, a person only having salary income should go for ITR-1. Similarly, ITR-2 applies for someone having salary as well as capital gains.

Mismatch in income and tax deduction 

Mismatch 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 income

The 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 filing

There 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 deadline

One 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.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s