MISTAKE 1: SELECTION OF WRONG ITR:
While filling ITR, if you select ITR form which is not appropriate in your case, you may miss to report entire / partial information to Income tax department. In such case tax department may issue notice for wrong/incomplete information.
Before preparing ITR, please read carefully instructions issued by Income tax department with respect to ITR forms.
MISTAKE 2: MIS/UNDER/OVER REPORTING OF DEDUCTIONS
The weirdest mistake by taxpayer is presuming that they can claim more deductions under Chapter VIA than actual investment, as there is no mechanism (while filing ITR) to check actual deductions.
Avoid over reposting of deductions only for the sake of few rupees of refund, which may lead to penalty, interest which might be higher than the refund amount. Check investment documents properly, whether investment is eligible for deduction or not & amount invested.
Salaried person should prepare ITR in accordance with form 16, to avoid mismatch between ITR and Form 16.
MISTAKE 3: NOT DISCLOSING ALL INCOME IN ITR
Most of the taxpayers miss to report all income earned by them (whether or not taxable) in ITR form. E.g. salaried taxpayer presumes that, they earn only from salary on which TDS done by employer, proprietors presumes income from business/ profession which they are doing is only taxable etc.
In case of the salaried taxpayer, he should check for income, if any, from FDds, mutual fund, shares, interest on saving bank accounts, income from freelance work, if any.
Proprietors should not make difference between income earned from business activities and personal investments as both are under common PAN. As under income tax proprietary business and owne,r both are assessed asthe single assessee.
Provide notional rental income for a second property if you have more than one house property and even if none of is let out.
MISTAKE 4: NON-REPORTING OF EXEMPT INCOME
Many of us think if income earned is exempt why should I report it in ITR?
'Exempted Income' like the PPF (Public Provident Fund) interest, dividends (up to 10laks), LTCG (long term capital gain) from equities, maturity proceeds of insurance policies need to be mentioned in the separate annexure of ITR (income tax return). This will reduce unnecessary income tax queries in future.
MISTAKE 5: WAITING TILL LAST MINUTE
Many of us think, we have much time to file ITR, or our computation of income is too easy not involving too much complications' etc etc. And we starts with saying like will file ITR today, tomorrow, next week.
Don't wait till the last date for filling if you think you are liable for filling ITR, starts working immediately as time and department (obviously e-filing portal) will not going to wait for you.
MISTAKE 6: WHOM TO CHOOSE
Many of the taxpayers choose self filling of ITR. It's good to self file ITR if you are well known with the process. Some of the taxpayers are the victim of misleading ads like "File your ITR in 5 minutes", "File with Rs 100" Etc.
Uploading of ITR is not the end of responsibilities; actual work starts only after filling of ITR. So please don't be a victim of misleading ads to save filling fees. Give your ITR filling work in right hand, with whom you can physically contact if required.
MISTAKE 7: FAILURE TO DISPATCH/E-VERIFY ITR V (ACKNOWLEDGEMENT) WITHIN TIME
Only uploading of ITR file on e-filling portal is not sufficient. On successful filling you should e-verify it or post signed copy to CPC (address mentioned on ITR at the bottom).
You should e-verify return immediately which will push your ITR for further processing. If you are not able to e-verify ITR, it is mandatory to send duly signed ITR V to CPC Bangalore by ordinary or speed post only. If you fail to do so within stipulated time your return will be treated as null and void.
CHECK FORM 26AS BEFORE FILING ITR
Form 26AS is your tax passbook and it reflects details of tax deducted (TDS) from your income and payment of advance-tax during the year. If you find any discrepancy in Form 26AS then you should notify the same to tax deductor to get it rectified.
Department reconciles the tax credit claimed by you in ITR and tax credit available in Form 26AS. The Department will deny credit of TDS claimed in ITR if it is missing in Form 26AS. Further, if any entry is found in Form 26AS but is not reported in ITR, a tax notice shall be issued to you to explain the reason for not reporting it in ITR.
#Source: Internet and practical case studies
Tags :itrIncome Tax