This year all those who have taxable income are required to file their return. Also those with income above Rs five lakhs have to compulsorily e-file their return. It’s very important to file error free Income tax Return to avoid future problems. Let’s see the most commonly committed mistakes those could be avoided.
Every year a large number of returns are rejected for incorrect personal details like name, bank account number, IFSC code and address. This leads to delays in refunds. So please be sure to fill correct personal details.
Many of us think that employer’s contribution to EPF has to be included in claiming section 80C benefits. It’s incorrect. Similarly only the principal repaid on housing loan is eligible for sec 80C. Many other deductions are claimed under wrong heads leading to their rejection and consequent arising of tax liability.
There are certain incomes which are left out erroneously. These could be
Though interest received in savings account up to Rs 10000/- a year it is not taxable under section 80TTA, the interest received has to be mentioned in the return under the head ‘Income from other sources’ and claim exemption.
‘Exempted Income’ like the PPF interest, dividends, LTCG from equities, maturity proceeds of insurance policies need to be mentioned in the separate annexure of ITR. This will reduce unnecessary income tax queries later.
These days many of us own more than one property. These may be self occupied or vacant. However as per the amendment in Income Tax Act 1961, now two properties can be claimed as self occupied. And the rest other properties are taxed at realizable municipal rates after deducting 30% for taxes and repairs.
Many of us file returns without verifying Form 26AS credit of TDS held with IT Department. If your employer or anyone else who has deducted TDS does not deposit the same with IT Department or fails to mention your PAN Correctly, that amount will not reflect in from 26AS leading to default. Hence do check that credit for TDS deducted has been mentioned in Form 26AS. If there is a problem take timely action to rectify the same.
Many of us have income from sources where TDS is not applicable. The individual is required to calculate the tax liability and pay Advance tax or self assessment tax before the closure of financial year, i.e. 31st March. The failure to do so will attract penalty of 1% per month from 01 Apr next financial year. At times people file returns without paying the applicable penalty.
Many are unable to choose the correct IT Form due to lack of knowledge. To illustrate, let’s say you are a salaried person, having owning one house, get some tax free allowances and getting interest on savings account. You may feel that you need to fill ITR 1. This is correct only if exempt income during the financial year is less than 15000. If it is more than Rs 15000 then you are required to file ITR2.
If you do not have digital signature while e-filing IT return, it is mandatory to send duly signed ITR V to CPC Bangalore by ordinary or speed post only. Sign the ITR V in blue or black ink in the box provided. The ITR V has to be sent within 120 days of filing of return. If you fail to do so within stipulated time your return will be treated as null and void.
Incorrect filing of tax returns will lead to many a headaches and troubles. This is not what we want. So please avoid above mentioned mistakes. If you are not confident of filing return all by yourself please seek professional help. It’s better to file return correctly as well as on time to ensure mental peace. Happy filing of return!
The author is Ramalingam.K an MBA (Finance) and certified financial planner. He is the Director & Chief Financial Planner of holistic investment planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He Can be reached at firstname.lastname@example.org
(Republished with Amendments)