Mistakes to Avoid: Filing Your Income Tax Returns

Mistakes one must avoid while filing ITR

Here we have 5 of the most commonly made mistakes that happen during the time of filing.

1. Using the wrong form

   This is a very common mistake that many individuals who file income tax returns make. The Income Tax Department has notified as many as 7 different ITR forms, ranging from ITR-1 to ITR-7. Depending on your income source and level, the ITR that you’re required to file would change. Let’s take a quick look at the different ITRs applicable to individuals and who should file them.

   ITR Form	Who should file them
   ITR-1	Individuals having income up to Rs. 50 lakhs arising from salaries, house property, or other sources
   ITR-2	Individuals having income above Rs. 50 lakhs arising from any source except business or profession
   ITR-3	Individuals deriving income from business or profession
   ITR-4	Individuals who opt for the presumptive taxation scheme under the Income Tax Act, 1961

2. Failing to disclose all sources of income

   Again, this is another major mistake that individuals tend to make when filing for income tax returns. Not disclosing your income sources when filing can have tremendous and dangerous repercussions. You could either be penalized or legally prosecuted for doing that, even if the nondisclosure was unintentional. Therefore, when you file for income tax, make sure that you include all your income sources including any interest income that you may have earned from your bank deposits. The same should be verified/matched with the details available under Annual Information Statement (AIS) which is available online on the respective person’s account (logged in with corresponding PAN) on the Income tax portal.

3. Incorrect or incomplete bank account details

   The taxes that you’ve paid in a year, through TDS and advance tax payments, may sometimes be more than what you’re actually required to pay. In such cases, you can actually get a refund of the excess taxes that you’ve paid to the tax department by filing ITR within the due date.

   To get a refund of the excess taxes paid, you’re required to specify your bank account details in the income tax return. Making a mistake while entering the details can either stall or delay the refund. And so, this is something that you should be mindful of while filing your ITR, especially if you have a tax refund due.

4. Missing the due date for filing returns

   Many individuals tend to procrastinate when it comes to filing their ITRs. Too much procrastination can lead to you missing the due dates for filing. And filing your ITR after the due date will attract a penalty of Rs. 1,000 if your total income is Rs. 5 lakhs or less and Rs. 5,000 if your total income is more than Rs. 5 lakhs. So, just to be safe, always make sure that you file your returns at least a month before the due date.

5. Forgetting to verify your ITR

   Successfully uploading your income tax return is far from the last step. For your ITR to actually be considered as filed by the Income Tax Department, you must verify the uploaded return. You can do the verification electronically through Aadhaar OTP or through an Electronic Verification Code (EVC). Therefore, the next time you upload your income tax return, ensure that you verify it immediately using any one of the above methods. 

 

Key Takeaways

1. You are required to file an income tax return if your income falls into the taxable income category.¹
2. When filing your income tax returns, choose the correct ITR form depending on your source of income, the total income earned in a year, your tax payer category, your residential status.
3. Your bank account details should also be correct and updated so that the income tax refund (if any) can be credited to the proper account.
4. File your income tax returns by the due date, as late filing may result in a penalty.
5. Verify your income tax return, which is the last step in the tax filing procedure.

 

Conclusion

Now that you’re aware of the most commonly made mistakes, make sure that you don’t commit any of them. Also, remember to file your income tax return as early as possible. Taking it too close to the due date is dangerous and may cause you to miss the filing date altogether.

 

FAQs

 

1. How can I manage my taxes better? ?

You can manage your taxes better by planning investments early, choosing the right tax regime, tracking income and expenses, using eligible deductions wisely, and aligning tax decisions with your long-term financial goals.

 

2. What happens if I miss the ITR filing deadline?

If you miss the filing deadline, your return will be considered a belated return. A belated return incurs a late filing fee of ₹5000 under Section 234F. However, if the total income does not exceed ₹5 lakh, the late fee is ₹ 1,000.¹

 

3. Can I revise my ITR if I make a mistake after submission?²

If you identify an error in your filed ITR before it is processed by the CPC, you may file a revised return. The rectification request facility on the e-Filing portal can be used only in response to an order or notice issued under Section 143(1) by the CPC.

 

4. Is it possible to file ITR without Form 16?

It is possible to file your ITR without Form 16. However, in such cases, you can use alternate documents, like Form 26AS, salary slips, etc., to assess your income.

References:

1. https://incometaxindia.gov.in/Pages/faqs.aspx?k=FAQs+on+filing+the+return+of+income
2. https://www.incometax.gov.in/iec/foportal/help/perform-rectification-faq