Irrespective of whether you are a professional or run a business, annual filing of tax returns will certainly bother you! ITR filing can be a complicated process for those who are doing it for the first time. No wonder many tax payers commit mistakes and end up paying additional taxes and penalties. Do not panic. Once you know about the common mistakes tax payers make while filing returns, you can avoid them in the future.
Here are top six probable mistakes that tax payers commit during ITR filing. Solutions depicted will help you avoid these mistakes.
First time tax payers may face problems with DSC (digital signature certificate) when filing online.
Read the filing process carefully. Follow instructions step by step. Certain programs like Java, XML, etc. on your PC should be enabled and updated.
You panic about an audit resulting in not claiming tax deductions that are justifiable. Your panic is a result of false rumors.
ITR filing should be audit-proof. This will help you file without risks. An audit is triggered in cases of high deductions, which is justified. Your tax debt thus gets reduced. But failure to claim deduction will only result in paying higher taxes and creates problems in the long run.
Filling of incorrect personal details in the application, resulting in rejection or delay in refunds.
Cross check your personal details before you submit. Your tax refunds are credited on your bank account by the government. Ensure that your bank account details including address and IFSC code is correct.
Not filing tax return on time.
ITR filing should be done on time. If you have missed the last date as an individual tax payer, obtain an extension by using Form 4868 provided you made payment of any tax due. You will get an automatic extension of three months. If you owe payment that you cannot pay, your filing will be rejected. You can obtain another extension of two months by using Form 2688 subject to terms and conditions.
Claiming deductions under wrong heads.
For example, if you are visualizing about the benefits of Sec 80C, note that it is applicable to the principal repaid on Housing Loan. If you are an employee with some company, your employer’s contribution to EPF cannot be included here. Likewise there are various other sections. Ensure claims under the right heads after a proper study.
Not including certain income including exempt income in ITR filing.
Before filing your ITR, make a note of your various sources of income like bank fixed deposit, exempt income derived from equities, dividends, PPF, properties other than self-occupation if any, etc. Include these while filing tax return.
According to Indian income tax regulations, due dates for filing returns are fixed for individuals and businesses. With the implementation of GST, the due dates differ according to the registration category, which are of 10 types depending on businesses. GST due dates apply to those who are registered with GST.
File your ITR right and stay stress-free!