Individual taxpayers often prefer to file their Income Tax Return (ITR) on their own. Unfortunately, even though income tax law is a complex area of the law, not everyone is a specialist in it. Because of this, it is likely that while submitting an ITR online, individuals can make certain errors that result in a failed tax return and even, in some situations, penalties. You can prevent mistakes by being aware of the ones that are frequently made or that you are likely to make. Here are 7 frequent errors to avoid while filing your ITR online.
1. Using an incorrect ITR Form:
Using the incorrect ITR form is a typical error that many taxpayers make, which causes the IT department to reject their submission. As a result, when filing your ITR, you should carefully choose the ITR form. ITR form examples and appropriate users are shown below:
ITR Form 1: Salaried individuals
ITR Form 2: Salaried people who earn money from investment capital gains
ITR Form 3: Individuals who are self-employed and get income from business profits
2. Omitting to check the Form 26AS:
A crucial document, Form 26AS contains information about your income, including advance tax paid, Tax Deducted at Source (TDS), self-assessment tax paid, and tax credits, if any. The information on Form 26AS and the employer's Form 16 may occasionally not match. Hence, it makes it reasonable to compare the facts in Form 16 with the specifics of Form 26AS before submitting your ITR rather than relying solely on Form 26AS.
3. Failing to include every savings account:
Many of us have several bank accounts, and if you have any overseas bank accounts, you must reveal the specifics of those accounts in your ITR. You must also disclose information about any bank accounts that were closed during the fiscal year. By disclosing this information, money laundering and associated activities are decreased.
4. Not disclosing sources of income:
Besides your wage and your business, there may be other sources of supplementary money. Rent from residential or commercial property, interest from fixed deposits, capital gains, etc. are all included in it. Taxpayers occasionally only report their wages or major business income rather than all of their sources of income. You are obligated by law to list all of your revenue sources. You must disclose earnings from your previous work if you changed jobs during the fiscal year.
5. ITR-V not being sent to CPC:
After 120 days of electronically filing your income tax return, you must deliver a signed copy of ITR-V to the Centralized Processing Center (CPC) of the IT Department in Bangalore if you are not using an Aadhar-based verification and digital signature. Your file will not be recognised if the ITR-V is not sent to CPC.
6. Not paying your advanced tax:
If you receive a salary, your employer will take the appropriate tax out of your pay in the form of TDS, so you won't need to pay the advance tax. You must pay the advanced tax, nevertheless, if you are a self-employed person or have income from sources other than your salary. The advance tax will accrue interest if it is not paid on time.
7. Not submitting a revised ITR:
You can file a revised ITR with the IT department to fix errors or mistakes made in the ITR filing, such as improper or inaccurate personal or financial information, incorrect deductions, etc. While checking your ITR, you should file amended income tax returns if you discover any errors or mistakes.