Don't make these Common mistakes while filing your ITR
1. Liable to file ITR even if no tax dues:
2. Filing return in incorrect ITR form:
3. Non-Reporting of all Income in ITR:
While filing ITR, you have to report all interest incomes whether you earn interest from bank/any party or you earn any profit/gain by selling shares. It would be a big mistake if you do not report all income in tax returns and you believe that negligible or petty income aren’t required to be reported. Taxpayers should keep in mind that taxpayers will get notice if they don’t report these petty incomes. Tax dept. receives regular information from banks and financial institutions about your transactions which are reconciled with your tax returns. If some tax has been deducted from your income but you don’t report the corresponding income in ITR, you might get a notice to explain the reason for not reporting the said income in ITR.
Before filing of ITR, it is recommended that taxpayers must analyse bank statement especially all credit entries to ensure that all incomes are reported in ITR. Any failure to mention these incomes can give tax distress.
4. Reconcile with Form 26AS before filing ITR:
Form 26AS reflects details of tax deducted (TDS) from your income and payment of advance-tax made or any refund received during the year. If you find any discrepancy in Form 26AS then you should notify the same to tax deductor to get it rectified. Since, Dept. reconciles all the details in ITR filed by taxpayer with the details reflecting in Form 26AS. The Dept. will deny credit of TDS claimed in ITR if it is missing in Form 26AS. Further, if any entry is found in Form 26AS but is not reported in ITR, a tax notice shall be issued to you to explain the reason for not reporting such income in ITR.
5. Lack of awareness about Tax Deductions:
In most of cases, salaried persons forget to declare tax deduction to their employers or unable to submit proofs of tax deductions in time. Due to these reasons, they are always in dilemma whether they can claim tax deductions which weren’t declared to the employer or not. It is very important to understand that eligible deductions can be claimed in ITR even if these were not considered by the employer. They can claim all eligible deductions despite the fact that those deductions aren’t reflecting in tax certificate Form 16.
More than 10 tax deductions are provided for under Sections 80C to 80U of the I-T Act. Some of these deductions are little known to the taxpayers, i.e., deduction up to Rs. 10,000 for interest earned from saving bank deposit, deduction for house rent, deduction for medical expenditures of family members, deduction if taxpayer is suffering from any disability, etc.
6. Clubbing of Income from previous employer:
If you have changed the job during the Year, then do not forget to report the salary income earned from previous employers. There are high chances that there would be change in the tax liability due to clubbing of income from previous employers. Also it would be possible that TDS might be deducted by the previous employer. Therefore, reconcile all details and pay the correct amount of taxes before filing of return.