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The most common mistakes people make while filing Income Tax Return (ITR)

10 Most Common Mistakes People make while filing Income Tax Return (ITR)

It is the time of the year when you need to file your income tax return. The last date for filing income tax return for individuals is 31^st July. Everyone has to file income tax return if the income exceeds the basic exemption limit allowed by the government. Filing income tax return is once a year activity if you don't commit any mistake while filing income tax return (ITR). The government of India has made the process of filing income tax return very easy and hassle-free by introducing e-filing. Following are some common mistakes that you should avoid while filing income tax return (ITR).

10 Most Common Mistakes People make while filing Income Tax Return (ITR)

1. Not filing income tax return (ITR)

It is the most common mistake that people forget to file income tax return. You need to file your income tax return if your income exceeds the basic exemption limit allowed by the government. To avoid this mistake always file your income tax return and that also before the last date.

2. Using wrong ITR form

Using wrong ITR form is also a common mistake committed by people while filing income tax return. The Income Tax Department has prescribed various ITR forms such as ITR 1 (Sahaj) - for individuals having income from salaries, one house property, other sources (interest etc), and having total income up to 50 lakh. The other forms are ITR 2, ITR 3, ITR 4 (Sugam), ITR 5, ITR 6 and ITR 7. You have to choose the correct ITR form for filing income tax return otherwise your tax return will be rejected by the Income Tax Department.

3. Incorrect personal details

You are required to mention correct personal details like name, PAN, address, e-mail Id, contact number, Aadhaar number, and bank account number with IFSC code to avoid rejection of your income tax return. For example, if you fill wrong bank account number then your tax refund (if any) will be transferred to that account. Therefore, you should file your tax return carefully to avoid such mistakes.

4. Not checking Form 26AS

Always check your Form 26AS before filing your income tax return. Form 26AS is the annual consolidated tax credit statement issued to PAN holders. This statement shows all the taxes received by the Income Tax Department against the PAN of the taxpayer during the financial year. Therefore, always verify your Form 26AS for any discrepancies before filing your income tax return for the year.

5. Not filing income tax return electronically

If your assessable income exceeds Rs 5 lakh then you have to compulsorily e-file your tax return. Senior citizens who are 80 years old or older can choose to file a physical income tax return (ITR).

6. Not claiming deductions

You should claim your deductions under various sections of Income Tax Act to reduce your tax liability. The government has given various deductions under Section 80. If you forget to claim deduction while filing income tax return, you may lose the money by paying more taxes. Therefore, always mention your deduction under appropriate sections to reduce tax liability.

7. Not disclosing exempt income

There are several types of incomes which are exempt from tax, but notifying about the same to the Income Tax Department is necessary. Exempted incomes such as interest onsavings account up to Rs 10,000 and dividends from stocks should be mentioned while filing income tax return to avoid unnecessary queries from the Income Tax Department.

8. Not disclosing interest on fixed deposits

Most of the people often avoid adding interest earned from their fixed deposits to their total income while filing income tax return. Interest earned on various fixed deposits should be added to the total income for the year and pay tax and pay tax accordingly to avoid unnecessary queries from the Income Tax Department.

9. Investment in the name of spouse and children

If you are investing your income in the name of your spouse and children then you have to add the income earned by your spouse/children out of that investment in your total income while filing income tax return.

10. Not verifying tax return

You need to either e-verify your income tax return (ITR), using the e-verify return option on the website, net banking, Aadhaar OTP, bank ATM, Demat account number, bank account number, registered mobile number and email or send a printed and signed copy of ITR-V to the Bangalore CPC within 120 days from the date of e-filing. If you forget to verify your tax return then your tax return will be considered as incomplete.

Hope you will keep in mind the above-mentioned points while filing income tax return (ITR) to avoid penalties and any unnecessary trouble. The last date for filing income tax return for individuals is 31^st July.