When handling your IT return filing, it is vital to pay attention to every detail. Making even the smallest mistakes can lead to getting a tax notice from the tax department. This is why we have come up with the list of some of the common mistakes people make while filing their income tax returns.
This article should be able to help you avoid these mistakes and file your income tax without any discrepancies. Here are some common mistakes:
Wrong Form
Every individual that qualifies for taxes, is required to report all of their income sources in the income tax return form applicable for them. This includes reporting sources of income that are eligible for tax and the ones that are tax-exempt as well.
If you fill the wrong income tax return using the wrong form, your ITR file will be called defective and you will need to file a revised return again. To find out which form is applicable for an individual for ITR fling, you have to identify what sources of income you are earning in that financial year.
For example, for a salaried individual, using ITR-1 is the right form to fill. If the individual earns his income from his salary and only has one property, they are applicable for the ITR-1 form.
Investment Incomes
If you are a taxpayer, you need to report all possible sources of income, including the ones earned from various investments. These include interests from fixed deposits, selling mutual funds, or other assets.
Most of the time, people forget to report the income they earned from their savings accounts and fixed deposits, which should be reported under income from other sources. But you should also remember that you can claim for deduction on interest earned if it comes under a certain limit.
This means if your internet is under Rs 10,000 then you can claim a deduction in a year from your bank or post office, whichever is applicable for the interest earned. This is applicable only if you are under the age of 60. If you are a senior citizen, you can claim deduction up to 50,000 in interest earned.
Exempt Incomes
Even if you have a source of income that is exempted from an income tax return, you need to report the source in your ITR form. To avoid getting a notice, it is better to report any source of income, even if it is exempted.
Income from Previous Jobs
If you have shifted from one job to another within the financial year, you are still required to report income from your previous jobs as well. In case you forget to mention the same in the ITR form, you will see discrepancies in your TDS certificate and Form 26AS and will get a notice for additional tax dues.
Bank Accounts
Every individual filing for an income tax return is required to report all of their active bank accounts. This has changed since 2015-15 financial year, earlier you were only required to file one bank account where you prefer to receive your income tax refund.
Rent
If you have properties other than the one you have occupied yourself, you are required to report the same with your total income. This is applicable regardless of whether you are earning rent from the property or not.
Revised Income
In case you found a mistake while handling ITR filing online, then it is your responsibility to rectify the mistake yourself by filing for a revised return. Failing to do so will lead to getting a notice.