The due date for filing of tax returns for individual taxpayers is 31st July of the assessment year. Putting it off to the last minute and filing it in a hurry can lead the taxpayer to disclose incorrect information which might have a negative impact on the outcome of filing of returns. Returns can either be filed manually or can be filed online. In fact, e-filing of tax return is mandatory from FY 2016-17 onwards if you have a refund claim in the return or have a total income of more than Rs. 5,00,000.
We have listed below some of the most common mistakes taxpayers make at the time of filing tax returns:
1. Selecting the Incorrect Form
It is of utmost importance to select the appropriate ITR form for filing of returns. Failure to do so can result in your return not getting processed by the income tax department. The selection of ITR form is based on the nature of income or the category to which the taxpayer belongs. In case a taxpayer has filed an incorrect return form,he is most likely to receive a defect notice form the department which must be rectified within the specified time limit.
If you are a salaried individual with income below Rs 50 lakhs and with no capital gains income, the appropriate form for you is ITR 1, while it is ITR-3 if you are an individual having income from business or profession.
To know more about the different ITR Forms and which ITR you must file, visit the ClearTax portal.
By using an e-filing platform like ClearTax, you do not have to worry about choosing the right form, as this is done automatically by the software.
2. Quoting the Wrong Assessment Year
While filing the returns, one must make ensure to provide the correct AY. For FY 2017-18 the correct corresponding AY is 2018-19. Mentioning the wrong AY increases the chances of double taxation and attracts unnecessary penalties.
3. Furnishing Incorrect Personal Information
It is essential that personal details viz name, address, mail id, phone number PAN, date of birth etc are accurately mentioned in the return of income. You need to ensure that the details tally with those given in your PAN.
Further, if you are looking at claiming a refund, make sure your bank particulars to which you intend your refund to be credited, like account number, IFSC code etc are accurately mentioned in order to receive your refund on time and without hassles.
4. Not Disclosing All the Sources of Income
If there is any income from any source other than the primary source of income, it must be disclosed. The income must be disclosed irrespective of being taxable or exempt. Many taxpayers out of ignorance, tend to miss out on giving details of exempt income.
Although the capital gains is exempt from tax, the details of the gains have to mandatorily be mentioned in the schedule applicable for capital gains. Not doing so may be questioned by the tax authorities.
5. Failure to Reconcile TDS With Form 26AS
It is important to check Form 26AS before filing the ITR. Form 26AS includes all the income details, Tax Deducted at Source (TDS), advance tax paid by you, self-assessment tax, etc. A salaried person must cross verify the details with Form 16 issued by the employer to avoid any discrepancy, which may lead to less refund or more payable taxes.
6. Not Paying Advance Tax/ Self-Assessment Tax
31st March of every year is the last date of a financial year. It is always advisable to pay your taxes within due dates to avoid paying interests and penalties. Therefore, a taxpayer must ensure that the tax dues are cleared on or before 31st March of the financial year. Failure to do so attracts a interest of 1% per month starting till the dues are cleared.
7. Failure to Dispatch ITR V On Time
After you successfully e-file your income tax return, please e-verify your ITR-V via Netbanking, Aadhaar Card or through the EVC process on your mobile number and email. It is important to verify your return because the IT department will start processing your returns only after they receive the verification. For some reasons if you are unable to e-verify your return, you can sign and send the ITR-V to the CPC via ordinary or speed post only. This has to be done within 120 days from the date of e-filing of tax return.