Filing Income Tax Return (ITR)? These mistakes may cause avoid double taxation, missed rebates
December, 03rd 2021
The deadline to file Income Tax Return (ITR) for Assessment Year 2021-22 (AY22) is fast approaching— it is December 31. The Central Board of Direct Taxes (CBDT) had twice extended for the last day from July 31 to September 30 and finally to December 31.
The last date was extended due to difficulties faced by taxpayers in filing ITR due to technical issues with the new tax e-filling portal — www.incometax.gov.in which was launched on June 7.
In a tweet, the tax department said: "On consideration of difficulties reported by the taxpayers in filing of ITRs & audit reports for AY 2021-22 under the IT Act, 1961, CBDT further extends the due dates for filing of ITRs & audit reports for AY 21-22."
Remember to claim all deductions
Section 87A: Let’s take a look at documents needed to file ITR by the due date. For starters, those with an annual income of upto Rs 5 lakh per annum can claim an income tax rebate under Section 87A. For this segment, income tax liability becomes zero.
Section 80G: Salaried individuals can claim House Rent Allowance (HRA) exemption if they live in rented accommodations. However, HRA is not included in the salary structure then the deduction can be claimed under Section 80GG. In such a case deduction will be a minimum of: Actual rent paid minus 10% of the taxpayer’s total income, Rs 5,000 per month or 25% of the total income.
Under section 80TTA, 80TTB: Deduction on interest income on savings account and fixed deposits can be claimed. Deduction of upto Rs 10,000 under Section 80TTA. Up to Rs 50,000 on interest income may be claimed under Section 80TTB in case of senior citizens. However, it is mandatory to report interest income in order to claim these. If the interest earned from savings bank account is less than Rs 10,000, then the entire amount will be tax-free. This income interest refers to income from fixed deposits, recurring deposits and time deposits.
Inaccurate bank details
Filing ITR is a tedious process and attention to detail is required in order to avoid mistakes. A common mistake is not reconciling Form 26AS and providing inaccurate bank account details and giving wrong disclosures.
Select right form
Failure to select the right ITR form may result in the rejection of return by the I-T Department. Different ITR forms are applicable for individuals with different sources of income. For example, for salaried employees with income below Rs 50 lakh with no capital gains income, ITR-1 form will be applicable. For businessmen or self-employed persons, ITR-3 has to be used.
Quoting wrong assessment year
It is extremely important to select the correct Assessment Year while filing ITR. For example, for FY2020-21, the corresponding AY will be 2021-22. Mentioning wrong AY increases the chances of double taxation and penalties.