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There is a lot of false information out there about what you can and can’t do on your annual taxes. Here are some of the biggest myths that plague the system and what the truth behind them actually is:

Hate them or not, you still have to pay them.

I Can Hide My Bank Accounts

No! Do not even try this. All the Income Tax Department needs is one bank account number to find out if there are any other accounts under your name. They will find out how much money you have and have earned, no matter where you try to hide it. AIR Scrutiny (CASS) allows them to do this. Moreover at the time of filing the ITR we need to feed the details of all the bank accounts in the name of the assessee. CBDT mandates disclosure of all Bank Accounts in ITR

Tax Guru - Dont Believe These Tax Accounting Myths Pic 1

Dead People Do Not Have to File Returns

Another falsehood. While, obviously, someone who has died cannot file a return himself or herself, a living person acting as a proxy can and should file the return on the deceased’s behalf. This proxy can also claim the refund if one is owed.How to File Income Tax Return of a Deceased Assessee?

Income Tax Filing Is Optional

ITR is mandatory. Visa applications, loan applications, bank accounts – all of these things require your most recent tax information to give you what you want and need. Not filing taxes prevents you from obtaining them.

The Internet Filing System Is Unsafe

The system is safe. Also, even if you turn in your ITRs in person so you can get the sticker or stamp that acknowledges you have turned everything in on time, the information will still be entered into the national system via an online portal. Your taxes get filed online either way, so you can save time by filing online at home – or any computer located in India that is connected to the web.

You Can’t Collect PAN Without Your PAN Card

If you lose your PAN Card, do not panic. You can still apply for duplicate PAN and for that you do not need any copy of PAN card you can apply for duplicate PAN without attaching copy of your lost PAN card.

These are just some of the most common myths that people believe when it comes to filing their taxes. The truth is that the system is safe, taxes are required if you earn a certain amount of income, and you can’t get out of filing by dying. If you aren’t sure of the rules, ask your lawyer or CA. He or she will explain anything you’re unsure of.

Erin Steiner is from the US and writes about finance, business and profiles companies like Reputation.com.

(Republished With Amendments)


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July 2024