Points to be Kept in Mind before filing Income Tax Return


The first step in filing of a tax return is to select the correct Form of return. It should be noted that the Forms of return may be changed in the middle of the year. The taxpayer, therefore, need to file in the new form. There are seven Forms of return notified by the tax authorities. Out of these, ITR 1 to 4  are applicable to individuals/HUFs, while ITR 5 is for Partnership Firms and LLP, ITR 6 is for Companies other than those claiming exemptions (See Rule 12) and ITR 7 is for  [For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D (Please see rule 12 of the Income-tax Rules).  Therefore, correct form needs to be filled in.


1. Interest from bank deposits or NSC certificates should be disclosed

Even though the deduction for interest incomes was withdrawn three years back, many people still do not disclose the interest which they may have earned from their bank deposits or NSC certificates. No matter how small the amount is, such interest should be disclosed in the return. One should not make the mistake of skipping the interest income altogether on the basis that it is not shown in Form 16, as in many cases, the employer may have not at all considered the interest income for computing the TDS of the employee. In respect of Interest on Saving Bank Account Assessee can claim deduction Under Section 80TTA.

2. Deduction for investment made under 80C, 80CCC & 80 CCD is restricted to Rs 1.50 lakh

Further, it should be noted that deduction for investment made under Section 80C, contribution to pension fund under Section 80CCC or for contribution to pension scheme of the employer under Section 80CCD is restricted to an overall limit of Rs 1.50 lakh. Benefit under Section 80C can also be claimed for tuition fees paid by an individual for their children and for the repayment of principal amount in respect of home loan taken by him.

3. Income of spouse or minor child may have to be clubbed with the income of taxpayer

There can also be cases where the income of spouse or minor child of the taxpayer may be liable to be clubbed with the income of the taxpayer as per provisions of tax laws. In such a scenario, it is pertinent that the correct Form of return is used to file the return of income.

4. Be cautious while calculating surcharge and education cess

It is common to make a mistake while calculating the amount of surcharge and education cess on the amount of tax payable. It needs to be noted that surcharge of 10% is not required to be added to the tax if the total income does not exceed Rs 100 lakh. However, education cess should be added to the amount of tax at the rate of 3% even if the total income is less than Rs 100 lakh. The correct method is to first add surcharge of 10% to the tax, if it is applicable, and thereafter, add education cess at the rate of 3% on such aggregate of tax and surcharge.

5. Safely file all relevant documents for future needs

Though the requirement to attach various certificates, documents, etc., along with the return has been dispensed with, one should not commit the mistake of trashing away such documents on the premise that these would not be required in the future. The tax authorities might require any document to be furnished by the taxpayer in case a scrutiny proceeding is initiated for verifying the claims made in the return.

6. Double check all key information like PAN No., bank account details, communication address etc

Some taxpayers may commit error in quoting the correct Permanent Account Number (“PAN”). The correct 10 digit PAN should be filled in legibly. Appropriate care is required while filling in the address as all the notices and other communication from the tax authorities is posted to this address.

In case of a refund, the bank account number needs to be filled in accurately. In case the refund is opted to be received via ECS direct into the bank account, adequate care should be taken to correctly fill in the MICR code. Any mistake may lead to problems in credit of tax refund and consequent inconvenience.


1. File the return in time

Taxpayers often tend to wait too close till the last day to file the return. This often leads to a lot of inconvenience. And even if, in order to avoid the long queues at the counters receiving the paper returns, a taxpayer plans to file the return online, filing very close to the last day is not advisable given the fact that peak load on the servers of the e-filing website during the last few days may make the whole online filing experience quiet frustrating. If the clock on the last day ticks beyond 12 at midnight, any return filed thereafter would be treated as having been filed on the next day.

Filing return after the due date may prove to be a costly mistake for a taxpayer who has incurred losses which he wants to carry-forward to future years (e.g., house property loss, short-term capital loss, long-term capital loss, etc.). Under the tax laws, such losses are not allowed to be carried forward for being set-off against the income of future years unless the return has been filed by the due date even though all the taxes have been pre-paid. Mostly, the taxpayers filing a loss return for the first time commit this mistake.

2. Online filing of returns

Many taxpayers, opting to file their return online, are of the perception that having filed the return online without a digital signature, submission of Form ITR-V is a mere formality which can be completed anytime. This is a misconception. If the return is filed online without digital signature,  A duly verified ITR-V form should be signed and submitted to CPC, Post Bag No. 1, Electronic City Post Office, Bangalore – 560100 by Ordinary Post or Speed Post (without Acknowledgment) ONLY, within 120 days from the date of e-Filing. If Form ITR-V is filed beyond 120 days, it would be deemed as if the return was not filed online in the first place and it might be too late by then.

Similarly, if a paper return is filed, the acknowledgement slip should be preserved carefully.

3. Key rules to be followed to ensure trouble free processing

  • Once E filing is done (without digital signature), ITR V needs to be sent in time to CPC. In case ITR V acknowledgement is not received within reasonable time, the assessee may call up the CPC call centre to verify status Nearly 10% of assessees have failed to send the ITR V to CPC after E filing.
  • Assessee needs to fill his email address, mobile number correctly to ensure appropriate communication from the Income Tax Department. The use of the Tax practioner/CA’s email address may not be appropriate.
  • The assessee should make sure the correct (latest) address, bank account number, MICR number is filled
  • The assessee should verify tax credits available in Form 26AS/NSDL websites. Mismatches are the single largest cause of incorrect tax computation. Non credits may be taken up with the TDS deductor and/or the banker as soon as they are noticed.

4. Impact of Errors made while filing returns

  • Returns can be classified as defective u/s 139 (9) and in some scenarios the return can be declared in valid / Non Est. ITD is not introducing this concept to cover certain types of errors in order to prevent future grievances.
  • Computation Errors – In electronic filing, it has been noticed that most of the errors are due to data errors as filed by the assessee This includes non filling of key schedules, wrong details etc resulting in rectification requests etc which delay closure of processing.
  • Inability to pay refunds to the assessee.

5. Precaution in filling Personal Information Schedule

  • Name: Has to match the PAN database
  • Date of Birth: Mistakes here will result in computation of higher taxes in case of senior citizens
  • Address: House/Flat no, City, PIN Code, are mandatory fields. Non filling will result in refund delays
  • E mail Address: Needs to be filled correctly, is the basis of all communication from CPC. Mistake will result in non receipt of all intimations from CPC. Use of Auditor/Tax practitioner’s ID may be avoided.
  • Mobile No: Full Mobile No without use of +91 needs to be entered. This is essential for all SMS based communication.
  • Sex: Should match the PAN database. If PAN database is wrong, it results in mistakes in computation.
  • Status : Should be correctly filled
  • Residential Status – the status of NOR and NRI should be mentioned only where applicable as they are not eligible for certain benefits available to resident assessee.

Thus, a little extra precaution on the part of taxpayers can help them avoid committing mistakes while filing of the tax return and keep them away from taxman.

(Republished with Amendments- Compiled by Taxguru Team)

Categories: Income Tax

View Comments (10)

  • i want to about the income tax return filled in physical form. How to check that return are are true and valid and not fake or false on the website of income tax return.
    thank you.

  • i know about the income tax return filled in physical form. How to check that return are are true and valid and not fake or false on the website of income tax return.
    thank you.

  • para no. 4. In the current itr return downloadead from the department in e filing webpage you can clcik and get the correct tax. so you need not calculate

    ITR-V you can do online e-verification either with aadhaar card or net baning or through pre registered ban account number

  • Its been a nice article written by the team. However i would like to draw your attention towards one aspect that ITR-2A and ITR-4S has not been mentioned in the article and also the ITR-4S can be applicable to Partnership Firm(NOT LLP) as per the new ITR Forms for the AY 2016-17.


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