Have you filed your Income Tax Return- Mistakes to Avoid

The deadline for filing the income tax return is fast approaching and many of you may not have yet filed your return. If you are one of them, get ready with your income tax login ID and password and follow these quick steps to avoid making any mistakes.

• Keep your Form 16 and Form 26AS handy. Form 16 is the TDS certificate issued by your company/employer, and Form 26AS captures all the TDS/TCS deducted from various sources.

• This year, you must decide whether to follow the old regime or new regime. In the new regime, the tax rate is lower, but you must forgo specified tax exemptions and deductions. I recommend you to calculate your final tax payable under both regimes and make an informed decision about how to proceed.

• When you start, you may see some pre-filled information, such as your personal details, income, deductions, etc. The data has been pre-filled based on two forms I requested you to keep handy (Form 16 and Form 26AS).

• You need to verify all the details carefully from Form 16 and Form 26AS. Check your personal details, bank account details, income, eliminations, deductions, prepaid taxes, and the final tax payable/refundable.

• That’s it. Proceed to file the form and e-verify the same from any of the options available. E-verification is a must to complete your return filing process.

Let me also state some common mistakes that you should avoid:

• If you have claimed a deduction for EMI paid on housing loan (under section 80C for principal and under section 24 for interest), download your income tax certificate as of March 31st, 2021 from your loan account and verify the break-up of principal and interest amount. Often, the figures in the provisional certificate may differ from the figures in the final income tax certificate. Make sure to claim the correct deduction for interest and principal amount.

• Remember, the interest that you may have received from your savings account or from term deposit is taxable under the head “Income from other sources.” But the good thing is that you get a deduction of Rs 10,000 under section 80TTA for AY 2021-22. However, the deduction is allowed only in respect of interest earned from a saving bank account and not for term deposits or time deposit.

• Another piece of good news is that if you are eligible for a refund after providing all of the necessary information, it will be paid to you with a 0.5 percent interest rate for each month or part of a month.

Hope you would have filed your return after following these quick steps.