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Mistakes to avoid while filing Income Tax returns
Income tax return for the assessment year 2018-19 can be revised by 31 March 2019.
The income tax department has notified seven ITR forms for filing of return for FY 2017-18. ITR filing process starts from choosing the correct form, which depends on the nature of income and the status of the taxpayers.
Taxpayers must fill the correct personal details such as name, phone/mobile number, date of birth, address, email ID. One should check that the details match with PAN (Permanent Account Number).
The following are the common mistake to avoid while filing ITR:
1. Choosing the wrong tax return form
The Income Tax Department has issued 7 types of income tax return (ITR) forms, and selection of an ITR form for filling tax return depends upon the type of income and status of the tax payer. ‘The disclosure requirements are different in all the forms and, therefore, it is important to choose the correct form while furnishing your income tax return, failing which your return can be treated as defective.
2. Gross total income exceeding basic exemption limit
You are required to file your income tax return if aggregate of all your income before deduction under various sections of chapter VIA like 80 C, 80 CCC, 80 CCD, 80 D, 80E, 80G, 80 GGA, 80 TTA exceeds the basic exemption limit. These sections deal with deductions available for various investments or payments made by you like PPF, NPS, ELSS, NSC, repayment of your home loan principal, school fee, life insurance premiums, mediclaim premiums, donations, interest on education loan, rent paid by self-employed etc.
3. Non-Disclosure of losses being carried forward
In order to carry forward certain losses incurred during the year for set off against income in future years, it is mandatory to file one’s income tax return on or before the due date. If the income tax return claiming carry forward of the current year’s losses is filed after the due date, such losses will not be allowed to be carried forward.
4. Non-Verification of e-filed ITR
Most of the tax payers are required to file their income tax return electronically. However, only furnishing the return electronically is not enough and you are also required to verify the return so that your identity is authenticated. “You can either e-verify the return by Aadhaar OTP, linking your login with Demat A/c, Net Banking or send the signed copy of ITR acknowledgment to CPC, Bangalore within 120 days. Failure to verify your return within the specified time can result in you being considered as a non-filer by the tax department,”
5. Assets or signing authority outside India by resident taxpayers
You are also required to file your income tax return in case you are resident in India for tax purposes and own any asset outside India in your own name as beneficial owner or have interest in any asset outside India or even when you are an authorized signatory for any account located outside India.
6. Non-Disclosure of Foreign Assets and Income
It is mandatory for all ordinary resident taxpayers to disclose correct details of their foreign assets and income outside India in their income tax returns. Under the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act, 2015, tax officers can levy a penalty of Rs 10 lakh if the taxpayer fails to furnish any information or furnishes inaccurate information in the return with respect to foreign income and assets. Still, lots of taxpayers do not disclose correct details of their foreign assets and income outside India.
7. Excluding FD interest from taxable income
While interest income up to Rs 10,000 from savings accounts is exempt, one is requited to pay tax on interest income earned from fixed deposits. However, taxpayers who are not aware about this rule, exclude fixed deposit interest from their taxable income, which should never be done.
The following are other few mistakes to avoid:
Checklist before submitting ITR