Common Mistake You Should Avoid While Income Tax Return Filing
Every year you are required to go through the IT Return Filing process so that you can report the taxable income and file for a return. But often people tend to make some very common mistakes which lead to complications. Here are some common mistakes that you should avoid for a smooth ITR filing process.
Using the Wrong Form
One of the most common mistakes people tend to make is using the wrong form continuously. The first thing to understand here is that the forms are different for different people. For example, if you are a salaried employee, you will need to fill up a different form compared to someone who owns a business themselves.
It is also important to notice that for individuals with different salaries, the income tax return form can be different. For example, if you earn more than five lakhs every year, you will be filling a different form, i.e. ITR-II form, compared to someone who has a salary below five lakhs per annum. In that case, they will need to fill up the ITR-I form.
Hence, always make sure before you start filling your details on the form, that you have the right one with you, make sure you double-check the form.
Incorrect Personal Details
Another one that is pretty common, filling the form with incorrect detail. It is important to make sure that you have all the right details in the form. Every year, a large number of income tax return forms are returned just because they made some simple spelling mistakes.
After you are done with the details, always double-check what you are going to submit. Apart from the form being rejected along with the returns, you might also need to face penalties as well. Not only will this delay the returns you were supposed to have, but you might also need to deal with complications such as penalties.
Especially make sure that you are filling the account number and IFSC code correctly while submitting your details. If you make an error, the income tax department will not be able to contact you in time. As a result, you will have to suffer, and in case of account details mistakes, someone else might be receiving your hard-earned tax returns.
Not Disclosing all Income Sources
Sometimes, people tend to forget that they need to mention all types of earnings, incomes and investments they have. This includes any fixed deposits, or property investments, rental properties and much more.
While filling the form and disclosing the sources of your income, make sure that you mention every possible source you can think of. If you have such investments and earnings, make sure you write them down in the 'income from other sources' column. Also don't forget, any source of income that can be exempted from tax, you will need to mention that.
Not Accounting Two Properties
According to the income tax act 1961, you can now account for two owned properties while filing for income tax return. These two properties can be claimed as self-occupied, and the rest properties that you might have will be taxable. A common mistake people tend to make while filing for returns.
Not Paying Self Assessment Tax
There are a lot of people who might have income sources that might not be applicable under TDS. in such cases; the individual will need to calculate and pay advance tax or self-assessment tax before 31st March—failing which will result in 1% penalty per month.
Make sure you reference these tips while going through your ITR Filing Online.