If you want to file your ITR defect-free then you need to avoid following Common mistakes which many users do.

1. Selection of the wrong ITR:

While filing ITR, if you select ITR form which is not appropriate in your case, you may miss reporting entire/partial information to the Income-tax department. In such a case the tax department may issue a notice for wrong/incomplete information. Please read the instruction of ITR before selecting any ITR.

2. Not Disclosing All Income in ITR:

Most of the taxpayers miss reporting all income earned by them (whether or not taxable) in ITR form. E.g. salaried taxpayer presumes that they earn only from salary on which TDS did by the employer, proprietors presume income from business/ profession which they are doing is only taxable, etc.

In the case of the salaried taxpayer, he should check for income, if any, from FD’s, mutual fund, shares, interest on saving bank accounts, income from freelance work, if any. Proprietors should not make a difference between income earned from business activities and personal investments as both are under common PAN. As under income tax proprietary business and owner, both are assessed as the single assessee. Provide notional rental income for a second property if you have more than one house property and even if none is let out.

3. Wrong Deductions:

The weirdest mistake by the taxpayer is presuming that they can claim more deductions under Chapter VIA than actual investment, as there is no mechanism (while filing ITR) to check actual deductions.

Avoid over reposting of deductions only for the sake of few rupees of refund, which may lead to penalty, interest which might be higher than the refund amount. Check investment documents properly, whether an investment is eligible for deduction or not & amount invested. The salaried person should prepare ITR in accordance with form 16, to avoid a mismatch between ITR and Form 16.

4. Non-Reporting of Exempt Income:

Many of us think if income earned is exempt why should I report it in ITR?

‘Exempted Income’ like the PPF (Public Provident Fund) interest, dividends (up to 10laks), LTCG (long term capital gain) from equities, maturity proceeds of insurance policies need to be mentioned in the separate annexure of ITR (income tax return). This will reduce unnecessary income tax queries in the future.

5. Misleading Ads:

Many of the taxpayers choose the self-filling of ITR. It’s good to self-file ITR if you are well known for the process. Some of the taxpayers are the victim of misleading ads like “File your ITR in 5 minutes”, “File with Rs 100” Etc.

Uploading of ITR is not the end of responsibilities; actual work starts only after filing of ITR. So please don’t be a victim of misleading ads to save filling fees. Give your ITR filling work in the right hand, with whom you can physically contact if required.

6. Failure to E-verify / Send ITR Copy to CPC Bangalore with 120 Days:

You should e-verify return immediately which will push your ITR for further processing. If you are not able to e-verify ITR, it is mandatory to send duly signed ITR V to CPC Bangalore by ordinary or speed post only. If you fail to do so within stipulated time your return will be treated as null and void.

7. Filing ITR Before Checking 26AS:

Form 26AS is your tax passbook and it reflects details of tax deducted (TDS) from your income and payment of advance tax during the year. If you find any discrepancy in Form 26AS then you should notify the same to tax deductor to get it rectified. Department reconciles the tax credit claimed by you in ITR and tax credit available in Form 26AS. The Department will deny credit of TDS claimed in ITR if it is missing in Form 26AS. Further, if any entry is found in Form 26AS but is not reported in ITR, a tax notice shall be issued to you to explain the reason for not reporting it in ITR.

For Filing of ITR for the Financial year 2018-19 & 2019-20 i.e. the Assessment Year 2019-20 & 2020-21, You can contact me on my Whatsapp Number 8879882025.

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Qualification: CA in Job / Business
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Location: Kalyan, Maharashtra, IN
Member Since: 07 May 2020 | Total Posts: 26
I am a Chartered Accountant. You can reach out to me on 8879882025. View Full Profile

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May 2021