Avoid these mistakes while filing Income Tax Return


Now almost all of us are busy preparing our Income Tax returns because the last date (31st July, 2018) is approaching fast. Before filing the retun, know the mistakes which the Income Tax payees frequently make. Avoid these mistakes while filing your return.

Now the month of July has arrived. All earning people of India including salaried persons have started to prepare the Income Tax return for the Assessment Year 2018-19 (Accounting Year 2017-18). Many are in a hurry. But if we make undue hurry, we may make mistakes. In case of Income Tax returns, mistakes may cause paying more Income Tax than necessary. Some mistakes may cause notice from Income Tax department.

So, let us know about the common mistakes which the Income Tax payees make, so that we can avoid such mistakes.



Mistake No. 1: Using wrong ITR form and indicating wrong Assessment Year

The first and a major mistake happens at the very beginning. Every Tax-payer must choose correct ITR form. How can we choose the correct form? Income Tax Department website and some other Tax websites mention the criteria for each type of form. Read the instructions carefully and choose correct ITR form.

At the very beginning of the ITR Form (of all types), the Tax-payer has to indicate the Assessment Year, and many of us make a mistake. We indicate the Accounting Year (previous Financial Year) as the Assessment Year. Please remember that the current Assessment Year is 2018-19 (current Financial Year).

Mistake No. 2:Failing to declare all bank accounts

An Income Tax payee is required to declare all bank accounts he/she holds. But generally many tax-payers fail to give details of all bank accounts, especially when the returns are filed during the eleventh hour. Please remember to indicate all bank accounts, except the dormant account(s), in the return.

Mistake No. 3: Failing to declare exempted income

Many people make this mistake. They don't indicate exempted income like long-term capital gain or dividend income in the ITR. Please remember that an Income Tax payee is required to mention all exempted income in the ITR. Otherwise, he/she may get a notice from the Income Tax department.

Mistake No. 4: Not declaring income from last job or foreign income

Many people working in private sector change jobs frequently. It has been found that many of them change job during the mid-way of financial year and forget to get Form-16 from the previous office. They don't indicate the income from their previous office and file incorrect return. As a result, they receive notice from the Income Tax department in due course of time. Please don't forget to collect Form-16 from your previous office and indicate the income from your previous job in the ITR form.

Similarly, if the Income Tax payee has any foreign income, he/she must indicate the same in the ITR. In this way, the payee can avoid receiving notice from Income Tax authorities.

Mistake No. 5: Confusion about taxation on interest

There is a lot of confusion on this matter although the rule position is relatively simple. Please remember that interest earned on the Fixed Deposits is not tax-free. Further, the Income Tax payee must remember that in case of savings account, Income Tax is exempted on interest upto Rs. 10,000/-. The Income Tax payee is required to calculate the tax on the interest payment based on the above two factors and indicate this in the ITR.

Mistake No. 6: Mismatch between figures in Form 26 AS and Form-16

Before filing the return, pleae check the figure of total tax deducted indicated in Form 26 AS and the figure indicated in Form-16. Before filing the return, the discrepancy, if any, must be reconsiled by the Income Tax payee. In case of more than one Form-16, the chance of discrepancy increases. This must be checked carefully.



Mistake No. 7: Not sending ITR-V

Some of the Income Tax payees make this mistake. Please remember that the process of filing return is not complete till the ITR-V is sent to the Income Tax department. So, after uploading the ITR form, generate ITR-V, sign it and send it to the Income Tax department within 120 days of filing the return. Now, the Income Tax payee can also e-verify ITR-V.

Final few words

All the Income Tax payees must avoid making the aforestated mistakes and complete the submission of Income Tax return well before the deadline (this year, it is 31st July, 2018). Enjoy the advantages of filing return early.


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Comments

Author: umesh08 Jul 2018 Member Level: Diamond   Points : 3

A nice article by the author to remind us these important things just in time.

I want to add that while filing I T return some people intentionally or unintentionally do not disclose some of their financial transactions. Today, due to strict online monitoring, it will be a big mistake to do so.

The author has mentioned many such things in his article. There are other things like rent received from one's house, interest received on certain non-taxable bonds or securities, interest accrued on the Post Office deposit schemes etc are to be shown in the return to avoid any confusion or mismatch at a later date. Whether the income is taxable or non-taxable it is advised to show them under the appropriate categories. There are capital gains which are charged with a different tax rate. For example there are some long term gains which are indexed and the ultimate tax will be less so we should include all such gains in our return.

If a person is not knowing these details he can consult a tax consultant or agent or designated tax preparer who will guide him by charging a notional fee. In any case it is advisable to give all the details of the income to avoid any embarrassment at a later time.

Author: K Mohan14 Jul 2018 Member Level: Platinum   Points : 2

Nice mentions from the author and this is a very useful article for those who are yet to cope up with Income tax returns and the documents required for the same. One more thing, one has to hurry up now as the last date is 31st July and there are every chance of you missing the date with the consultant as many people are rushing to file the returns today and tomorrow. And I heard that Rs 5000/- fine would be levied for late submission of returns. Luckily our income tax returns were submitted and acknowledged by the department too. So never postpone this matter to future.



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