ITR Filing: 5 Common Mistakes That Can Draw Income Tax Notice
The Central Board of Direct Taxes(CBDT) has again extended the deadline for filing of Income Tax Return FY 2018-2019.This no doubt has given some relaxation for taxpayers to file ITR. However, at times it may happen that we make a mistake while filing our ITR at the last minute. Here are common mistakes you should avoid while filing for your Income Tax Returns.
The Central Board of Direct Taxes(CBDT) has again extended the deadline for filing of Income Tax Return FY 2018-2019. Taking to Twitter, CBDT informed that “In view of the constraints due to the Covid pandemic & to further ease compliances for taxpayers, CBDT extends the due date for filing of Income Tax Returns for FY 2018-19(AY 2019-20) from 31st July, 2020 to 30th September, 2020,vide Notification in S.O. 2512(E) dt 29th July, 2020.” This no doubt has given some relaxation for taxpayers to file ITR. However, at times it may happen that we make a mistake while filing our ITR at the last minute. These could include mentioning the wrong bank account number, forgetting to declare interest income, or claiming the wrong deduction. Here are common mistakes you should avoid while filing for your Income Tax Returns.
1.Not submitting ITR on time:
Not submitting your ITR on time can be one of the main reasons to get Income Tax Notice. Specially, for every salaried one it is very crucial to file ITR before July end of the following financial year along with the use of accurate audit. If you do not file ITR on time you may get a reminder notice from the IT department before the due date of filing ITR. If you cross that due date, then you have to pay the late filing fee as penalty and the penalty charge may be from Rs.5,000 to Rs.10,000. Also, the incorrect ITR information may bring to get an intimation from the IT Department {Sec 139 (9)} within 15 days of filing ITR mentioning to revise the changes and send again. If you fail to do so, you must pay penalty or your ITR will be declared as invalid or not filed. So, to avoid getting any notice from IT department, you must file your ITR for particular assessment year before the deadline ends.
2.Using the wrong ITR form:
This is the most common and essential part to keep note of before filing ITR for every taxpayer. By selecting the wrong ITR form you can get notice from the IT department. Every year Income tax department declares ITR forms according to the tax slab rate and eligibility criteria. The change of the ITR form every year is the reason that taxpayers need to revise their return every year and file a new return. This is to note that do mention the correct and exact details while filing the ITR in the new form based on your tax slab rates. There are different forms according to your income like ITR-1, ITR-2, ITR-3 etc. Select those forms correctly. Along with other details electricity bill over 1 lakh must be mention along with other income details.
3. For not disclosing all sources of Income:
Non-disclosure of income is the very common mistake most of the taxpayers (salaried) do while filing ITR. Apart from salary it is very essential part of tax to disclose the income from nay other sources which can be income from banks savings account, rental income from house or property if any, capital gains income, etc. It is also suggested by many tax experts to mention gifts, dividends, interest on tax-free bonds, etc to mention. Any income from foreign assets need to be reveal while filing ITR. In simple way, any type of income apart from your salary must be disclose in the ITR. Remember, any single mismatch regarding income can lead you under scrutiny by the Income Tax Department. The tagline is any income on which TDS has been deducted needs to be disclosed by taxpayers.
4. Mismatch in income form 26AS and TDS certificates:
For salaried taxpayers- Form 26AS is very necessary form to look after before filing ITR, otherwise it may lead you to payment issues later. Before filing ITR, it is advisable to keep all TDS certificates like Form 16, bank interest certificates Form 16A, TDS certificate from sale of property-Form 16B, also do check whether accurate TDS has been deducted against the PAN mentioned on Form 26AS. Form 26AS is a combined form which shows TDS deducted from all sources against your PAN. Always check properly that there should not be any mismatch in the numbers mentioned. If in any case values mentioned are not matching, then inform your TDS deductor immediately to check and fix it ASAP. Any delay in mismatch can interrupt you for claiming a credit against TDS later on. So, compare all your forms -26AS along with Form 16, Form 16A timely.
5. Not claiming tax deductions correctly:
It is very important for taxpayers to keep all correct documents and income related papers details with them while filing ITR. This will make easy for taxpayers to claim deductions correctly. Even if you have not declared correct tax incomes to your employer you still can claim tax by giving all correct details to the IT department while filing ITR. Also, do keep in mind if you had changed two three jobs in one financial year then you must check that salary details are mentioned in all Form 16s by all employers you worked with.
Remember, Tax is a very complicated issue. So, it is always advisable to take help from your CA or any financial expert before filing ITR. A single mistake can bring you to get IT notice and have to pay penalty. Last but not the least, don’t forget to mention you bank account details correctly by linking it with PAN and e-verify your returns as well to avoid any future disruption.