Don't make these mistakes while filing ITR to avoid tax noticea
July, 24th 2020
Making a mistake in your tax return can lead to the tax department becoming suspicious and launching an enquiry against you. You may also get a notice from the tax department.
Income Tax Return (ITR) filing one of the most important financial responsibilities for people with income above Rs 2.5 lakh. In order to ensure that you do not get a notice for from the Income Tax Department, it is important for you to file your returns on time and make sure that you have followed all necessary steps.
Making a mistake in your tax return can lead to the tax department becoming suspicious and launching an enquiry against you. You may also get a notice from the tax deparment. In order to avoid such an incident, here are some mistakes that you need to avoid while filing your tax returns.
1. Wrong ITR form: Every year, the Central Board of Direct Taxes (CBDT) notifies new ITR forms for the relevant financial year. From ITR-1 to ITR-7, different forms have been prescribed to different types of taxpayers. One of the biggest mistakes thart you can make while filing your tax return is choosing the wrong form. Since the forms are revised every year, there is a chance that taxpayers no longer have to file the same ITR they filed the previous year. They may also have to disclose additional details due to the introduction of new fields which are added every year.
2. Missing deadline: You must always file your tax returns before the deadline. The time for filing of original as well as revised income-tax returns for the financial year 2018-19 has been extended to November 30, 2020. The due date for the income tax return for the FY 2019-20has been extended to November 30, 2020, as well. The last date to file the belated income tax return is December 31. While one can file returns before or on March 31, 2020, as well, they will have to pay a hefty penalty.
If individual files belated ITR on or before December 31, he or she will require to pay Rs 5,000 as penalty while filing it after December 31, but before or on March 31 will make you pay Rs 10,000 as fine.
3. Not e-verifying the ITR: According to the Income-Tax department, if you have filed your tax return but have not verified it, the return will be considered invalid. Therefore, it is important to make sure the once you file your return, it is verified. There are five ways to e-verify the return and one way to do it offline. Such as verification through net banking, Bank ATM, Aadhaar OTP, e-filing portal, Demat account and by sending a signed ITR-V or Acknowledgement receipt through the post.
Once you have uploaded your ITR on the e-filing website, you get 120 days to verify your return. ITR verification can be used only if you are filing tax returns which are not required to be audited, i.e., using ITR-1, ITR-2 and ITR-4.
4. Not reporting all sources of income: A lot of salaried individuals often make the mistake of not reporting income from other sources such interest earned on fixed deposits, capital gains on debt/equity instruments etc. It is important that income under all heads of income be reported correctly. In case there is a discrepancy, you may get a notice from the tax deparment. Note that since most records are now integrated online, any mismatch in reporting of an income may put you under the scrutiny.
5. Income and tax deduction mismatch: Form 26AS is a consolidated tax credit statement which reflects TDS deducted against your PAN from different sources of income. The same can be downloaded from your e-filing account on the I-T website or TRACES website. Before filing your income tax return, it is important to ensure that your income reflected in Form 26AS and Form 16/16A match. In case of any discrepancy, inform the deductor to correct it from his end as any difference may attract a notice from the taxman.