Most of the Individual taxpayers file their own ITR themselves. Since income tax is a complex law, an ordinary tax payer is bound to commit certain mistakes while filling the ITR forms.  In this article I intend to discuss some of the most common mistake committed by individual taxpayers while filling the ITR and which can be avoided.

Filling in the schedule CG of capital gains

The schedule for furnishing details of capital gains “CG” is the most complex part of the entire ITR form. There are different holding period requirements for different classes of assets for qualifying as long term capital asset. Even there are different tax rates for different category of long term and short term capital gains. And coupled with various exemptions available in respect of various long term capital gains, filling up the CG schedule is herculean task for even for a well-informed Chartered Accountant. So an ordinary taxpayer needs to be extra careful while filling it up. Be careful in bifurcating your taxable capital gains in each of the four quarter for computation of advance tax liability as the law requires you to pay the capital gains tax instalments for capital gains in the balance instalments falling due after the capital gain transaction. A small error may cost you in terms of higher interest. Likewise, you are also required to furnish details of capital gains taxable at the different rates. Any incorrect information furnished may result in incorrect payment of taxes and issue of notice by the income tax department.

Email ID and mobile Number

With increased digitisation, the income tax department is increasing relying on electronic communication. So instead of sending you physical communications the income tax department nowadays sends you all the communications including various notices on the email address and mobile number registered with them. So it is important for you to ensure that these details are upto date with income tax department. So please verify that the email address and mobile number currently in use are the same which get prefilled in the ITR form as per their records. In case you have changed your mobile number or email address recently, please update the same under your profile. Please do not use the email address and mobile number provided by your employer but preferably use your personal email address and mobile number to ensure that there is no break in case you change your job.

Details for refund bank account

As the income tax department in most of the cases remits the income tax refund in the bank account directly, it is important for you to ensure that the bank details opted for credit of the income tax refund are correct. In the eventuality of you having furnished wrong information about your refund bank, the refund will not get credited to your account.  In order to get such refund, you will have to go through the tedious process of making request for reissue of refund. So ensure that the details like account number, IFSC code etc. are correctly mentioned. If possible, do not use the bank account for refund purpose which you are planning to close in near future. The employers generally ask the new employees to open a bank account with a bank as desired by the employer for getting credit of salary. If possible, do not use such an account also and instead use your personal bank account as you may close it after leaving the job without realising that you have furnished details of the same account for your income tax refund.

Particulars of tax deducted and paid

As the taxpayers are not allowed to attach any document as proof of payment of taxes with ITR, the credit for TDS is given on the basis of information available with tax department. So while filling details of TDS, please ensure that the TAN number of the deductor is correctly mentioned as per form no. 26AS. Likewise for taxes paid by you ensure that the details of challan number and BSR code for payment of advance tax and self-assessment tax are correctly reflecting in in the ITR. In case of even a minor mistake, you may not get the credit for the taxes and may even get a demand notice and in order to get the matter straightened you will have to go through the hassle of filing rectification request under section 154 to get the error corrected.

Foreign bank accounts in case you are a resident

Those of you who had stayed abroad even for a short spell and had opened a bank account have to submit details such bank account/s in case the same was not closed before you came back to India. This you have to do even if you had withdrawn the entire balance emptying the account. In case any bank account still remains in your name which is not yet closed, you cannot use the simplest ITR i.e. file ITR 1 but will have to use ITR 2 and furnish details of such bank accounts.

So those of you are abroad please ensure to close your bank account before you come back to India to avoid the need to file more elaborate ITR form.

Balwant Jain is a tax and investment expert and can be reached on [email protected] and @jainbalwant on twitter

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10 Comments

  1. S.Govindaswamy says:

    In ITR 2 Form for AY 2021-21 released by IT Dept, Sch CG- B- LTCG- S,No 4 -LTCG covered by Schedule 112 A appears to be incomplete .
    1. No column is given for deduction of Rs 1 Lakh from LTCG.
    2 There is no other place in the form for entering this deduction.
    3. In the website of saginfotech.com I saw another form giving column for this deduction.
    4. Has IT Dept released the form of previous year?
    5. Is 54 F applicable to this CG?
    Thanks
    Govindaswamy

    1. rugram says:

      In Schedule SI, item 2a, the exemption of up to Rs 1 lac is taken into account by the system. Also, in Schedule TTI, item 1b, the tax payable figure takes into account the exemption of Rs 1 lac on LTCG from Sch 112A.
      However, it would have been better if the form mentioned on Sch 112A that the exemption up to Rs 1 lac will be shown in Sch SI/TTI, so that assessees would be assured that this exemption has not been omitted by the system.

  2. S K Gupta says:

    Thanks I fully agree with your observations. .
    I understand you agree with me that if TDS as loaded prefilled is correct, no need to fill details.

  3. DIPAK JAMBUSARIA says:

    In new IT website, there are prefilled forms giving details of one’s earnings. It is not getting down loaded. If you can help on that

  4. rugram says:

    Thank you, Mr Balwant Jain, for a very useful article.
    In respect of 26AS, as of now, the pre-filled TDS schedule on ITR 2, shows only amounts – why is it that the Dept. cannot pre-fill the other details such as TAN? The only information that needs to be filled in by the assessee should be whether the TDS amount pertains to him and/or to some other person, as an exception.
    Further, totals of amounts appearing in 26AS should be shown pre-filled on 26AS, to avoid item by item comparison with the assessee’s record, in case there are several items in a schedule. This is a simple addition to the computer programme of 26AS, but would help the assessee. If and when 26AS is able to include ALL items under ‘dividend’, as promised by the Finance Minister, giving the total on 26AS would be of help.

  5. Subramanian says:

    If the capital gains in the first quarter is negative (i.e. net loss), there is no way to show it. The column did not allow negative entries in the previous Java utility. The only alternative appears to be show it along with the 2nd quarter where there may be net gain

  6. S K Gupta says:

    very informative. just one clarification pl.
    it is about TDS shown in 26AS. in case prefilled data is loaded from IT site and data of TDS is correct, is there a need to fill details. i have asked this question because if one does not fill details , no error is pointed in the schedule.

    1. rugram says:

      If the pre-filled TDS schedule does not include an item which appears in 26AS, one has to fill in all the details as an additional entry in the schedule, including TAN, whether the amount is applicable to the assessee (self) or another person, etc. In such cases, I found that while validating the ITR, the system asks us to fill in the details of all other pre-filled items too such as TAN etc. This is an avoidable work for the assessee.
      Further, the columns to enter details of the person to whom a (missing) TDS entry pertains, are confusing. What is required is the PAN no. of the other person and not of the assessee in case the additional entry pertains to someone else, but the columns shown in the Table give the impression that the PAN details required to be entered, are of the assessee himself.
      What I don’t understand is why 26AS does not show the totals of the entries under various schedules. This total should be shown so that the assessee doesn’t have to take the totals of the entries himself, to compare with his record. The I-T Dept. should make a provision for totals of all the items included in each schedule of 26AS to help assessees.

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