*Here are some common mistakes you need to avoid while filing for ITR – BusinessToday

Clipped from: https://www.businesstoday.in/latest/trends/story/income-tax-returns-here-are-some-common-mistakes-you-need-to-avoid-while-filing-for-itr-341244-2022-07-12

Any mistake while filing ITR can lead to a penalty or tax notice from the Income Tax Department. Follow the steps to know more.

Income Tax Returns: Here are some common mistakes you need to avoid while filing for ITRIncome Tax Returns: Here are some common mistakes you need to avoid while filing for ITR

As the due date of filing Income Tax Return (ITR) approaches, one could end up with numerous tax filing mistakes. It can turn out to be a costly mistake as any oversight can lead to a penalty or tax notice from Income Tax Department. Therefore, one needs to be careful while filing ITR as you might be required to file the revised ITR in case of any discrepancy found by the Income-tax Officer.

To save you from the hassle here is a lowdown on some of the common mistakes while filing an ITR by Yeeshu Sehgal, Head of Tax Markets, AKM Global, a tax and consulting firm.

Choosing Incorrect ITR Form: In order to file the ITR, one should show utmost care in choosing the correct ITR Form. The selection of the ITR Form is based on the nature of income or category to which the taxpayer belongs. Choosing the incorrect ITR form may lead the return to be defective by the Income Tax Department which has to be correct within the specified time period. For example, in case you are a salaried person, you can file ITR Form-1 but in case you are a salaried person having income from capital gain you need to file ITR Form -2.

Ignoring Form 26AS And TDS Certificate and not matching with AIS: Form 26AS is one of the crucial documents you must verify before filing ITR. This form includes all the income details, tax deducted at source, advance tax paid, self-assessment tax, etc. It also contains details of tax credits you might be eligible for. The key reason you must cross-check Form 26AS and Form 16 is the mismatch between details and calculations provided in both forms. Further, matching the same information with the Annual Information Statement (AIS) should be done as well.

Quoting Incorrect Personal Information: Taxpayers should be very careful while furnishing personal details like name, address, mail id, phone number, PAN, and date of birth in the return. They need to ensure that their details should be matched with the actual and latest details. For example, if they provide the wrong bank details in their ITR, any tax refunds they are entitled to will be delayed.

Missing Due Dates: The taxpayer should file ITR before the due date otherwise has to incur penalties which are as follows:

a) A late filing fee up to Rs 5,000

b) A penal interest rate of 1 per cent per month will be charged on any unpaid taxes.

c) Delay in receiving the refund on any excess tax paid.

Not Disclosing All the Income:  While filing ITR, it is mandatory to disclose income from all sources. It may possible that you have income from multiple sources even if you are a salaried individual. However, still, you have to disclose all other income along with the sources even if such income is exempt from tax. Many taxpayers out of ignorance, tend to miss out on giving details of exempt income.

Selecting the Wrong Assessment Year: Assessment year refers to the year that follows the financial year whereas financial year refers to the year in which the income is earned. So, it is essential to choose the correct assessment year while filing the tax return. 

Not linking PAN with Bank accounts It is necessary to link PAN with a bank account because in case a tax refund is credited by Income Tax Department then the same gets credited to the bank account. So, the bank account needs to be validated to get a refund.

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