5 Common Income Tax Mistakes To Avoid

By | July 21, 2017

5 Common Income Tax Mistakes To Avoid

If your annual income is higher than the basic exemption limit as per the Income Tax rules, then you are liable to file the Income Tax return (ITR). Thus, if your income exceeds Rs. 2.5 lakh, then you need to file an income tax return. You can either file your returns physically or may go for an online filing(e-filing). It is important to note here that e-filing is mandatory for individuals with income over Rs. 5 lakh. People while filing their ITR make some common mistakes, which can result in scrutiny by the IT department. So, to help you file your ITR without errors, we’ve listed out 5 commonly made mistakes that you should avoid.

Late ITR filing

31st July 2017 is the last date to file the ITR without any penalty. Many people unnecessarily wait till the last day to file their return. In the last-minute rush chances of making mistakes are high and you may not get the time to review your ITR. Also, sometimes you may find important documents missing such as bank statements or investment details and in such scenario, you cannot proceed with the tax filing. So, file your ITR as early as possible and keep yourself away from last minute hassles.

Not including the interest income

While filing the ITR, people often forget to consider the interest earned from various Savings Accounts and Fixed Deposits. It is important to note here that interest earned from your saving account is exempt up to Rs 10,000. However, FD interest income doesn’t enjoy this exempt. It is possible that collectively your gross interest income could cross the threshold exemption limit of Rs 10,000, so it makes sense to consider all your saving account interest while filing the ITR. Similarly, you should not commit the mistake of not taking into account the FD interest while filing the return.

Incorrect personal details

It is very important that you mention the correct personal details such as mobile number, email, bank details, address, date of birth, etc. You would not like to be in a situation where you miss the TDS refund because of a wrong bank account. A wrong email or address would mean missing out on acknowledgement or important notices from the IT department.

Mistake in claiming the TDS

Since form 26AS is your consolidated tax statement, it is important that you match the TDS deducted before filing the ITR. You must check whether the TDS calculation in the ITR matches with form 26AS or not. Sometimes the employer deducts the TDS from the employee, but forgets to deposit it to the IT department, which can result in a big mismatch. Always furnish the TDS details deducted by the previous employers to your new employer so that your exact tax liability remains updated when you switch the job. Your mistake in furnishing correct TDS detail can create errors in your ITR and devoid you from getting the TDS refund on time.

Delay in verification of ITR

What after you have filed the ITR? Many people think that after filing the ITR, their job is over, but wait! After filing the ITR, you need to verify it by sending the requisite documents to the IT department or get it e-verified. For physical verification, ITR-V has to be submitted to CPC, Bangalore in 120 days from filing the ITR. Do not delay in verifying your ITR or you may forget to do this within the time limit.

Other mistakes that you should avoid while filing ITR

Be careful while filing your returns and do not commit mistakes like using the wrong form to file ITR, reporting wrong financial detail, skipping demonetisation period cash deposit details, not reporting exempted income, mentioning wrong assessment year, forgetting to claim deductions under appropriate headings.

Make a habit of rechecking your entire return at the last. Even after taking extra care, if you commit some mistake, then you have a chance to file the revised return. So, do not delay filing the revised return. As per recent guideline by the government of India, you will now get a year from the end of the previous financial year to file your revised return.

(The writer is CEO, BankBazaar.com)


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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of BankBazaar.com. Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

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