ITR 2020-21: Avoid making these 5 mistakes while filing income tax returns

The income tax department has extended the due date for filing income tax returns to January 10, 2021 from December 31, 2020.

Here are some common mistakes you should avoid while filing your income tax return:

-You must fill out the details under capital gains or loss made, if you have made any transaction related to shares or mutual funds sales during the year. It will be considered a sale or redemption and capital gains or loss will be calculated depending on the purchase and sale price, in case you have booked gains or loss in your mutual fund or shares and invested the proceeds in another scheme or company. The I-T department may consider it as concealing income and serve you a notice or charge penalty if you don't mention the same in your income tax return.

- The interest income earned on the savings account is another common mistake that is not taken into account. The interest income from a savings account of up to Rs 10,000 in a financial year is not taxable. Under the head “Income from other sources", the interest income has to be shown in the income tax forms. Deduction has to be claimed from the same under section 80TTA.

-Taxpayers make another mistake by not claiming TDS or TCS back, this can lead to higher tax liability. Before filing their income tax returns, the taxpayers should see their Form 26AS so that they don’t miss out on any income on which tax has been deducted. After considering the TDS and TCS paid, it is important to calculate the tax liability.

-While filing your income tax return, it is important to pre-validate your bank account. Especially in cases where you have a tax refund to claim. In case your bank account is not verified, the tax department will not credit refund. The tax department credits the refund directly to the bank account of the taxpayer now. It is important to verify your bank account and it can be done online through the tax department’s website.