The deadline for filing income tax return (ITR) is just around the corner and people should do it as fast as possible. However, completing the process at such a late stage often leads to unintentional mistakes in the filing process, which could lead to a further delay.
Since filing a tax return is a tedious process, individuals need to be extra careful as they will have to file a revised ITR in case of the smallest error. Besides, there are numerous mistakes taxpayers could make while filing ITR.
Below are some of the most common errors that individuals should avoid while filing an income tax return:
Selecting incorrect form: This is probably the most common mistake individuals make while filing an income tax return. Selecting the appropriate ITR form is important and failure to do so may result in your return not getting processed by the tax department. In a situation where an individual filed a return on an incorrect form, the tax department will issue a notice. For instance, ITR-1 is applicable to all salaried individuals with income below Rs 50 lakh and no capital gains income. Meanwhile, ITR-3 is applicable to individuals who have income from a business. Click here for more information on other ITR forms.
Incorrect personal information: Another common error is providing incorrect personal information. In any case where an individual provides incorrect personal details, the tax filing process is hampered. It is essential to correctly mention details like name, address, mail id, phone number, PAN, date of birth. You also have to ensure that the details tally with the information in your PAN. In case you are looking to claim a refund, ensure that bank particulars like account number and IFSC code are accurate.
Quoting wrong assessment year: This mistake is often committed by people who are filing their income tax return for the first time. While filing returns, it is important to mention the assessment year accurately. For FY2019-20, the corresponding accounting year (AY) will be 2020-21. In a situation where wrong AY is mentioned, there are higher chances of double taxation.
Not disclosing all sources of income: Now, this one is a major error and individuals should be extra careful about reporting all sources of income to the Income Tax department. If you have any other source of income besides your primary source, it is important that you mention it in your ITR. As per rule, taxpayers have to disclose income from all sources including savings account interest, fixed deposit interest, rental income from housing property, income from short-term capital gains and any other source. It may be noted that the income has to be disclosed irrespective of it being taxable or exempt.
Form 26AS mismatch: Tax experts always advise individuals to verify the Form 26AS before filing ITR. The Form 26AS includes all kinds of income details, TDS and advance tax paid by an individual, self-assessment tax and more. All salaried individuals need to cross verify the details with Form 16 issued by the employer with the Form 26AS. In a situation where TDS is not reflected in the Form 26AS, individuals will not get a credit for tax deductions that are not mentioned. Taxpayers should note that mismatches between the Form 26AS and Form 16 or TDS certificates may result in lower refunds or higher taxes.